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Rick's Message to Readers

Dear Readers,

Although we’ve had astounding success obtaining principal reductions and/or lowering interest rates for hundreds of borrowers, the increasingly negative press coverage surrounding loan modification providers has reached a flashpoint and we can no longer bear the risks of being associated with this stigmatized industry. As you may have found on our website, satisfied New American loan modification customers from across the country wrote and called in to support the work we have done on behalf of struggling American homeowners. Sadly, a few greedy opportunists who chose to take advantage of consumers and mar the credibility of any company involved in this industry have forced our decision to no longer offer loan modification services.

In an effort to support the scores of borrowers still calling in for our help, we have taken the time to publish information on how to obtain a loan modification on your own. We are glad to provide this guidance as it remains our sincere desire that any American in need has the opportunity to secure a modification and keep their home. We hope you find it empowering.

Finally, please remember that servicers are not the enemy. Many of them do want to help but are simply overwhelmed by the sheer volume of modification requests. Be prepared for a lengthy process and most importantly, be complete and timely in providing the information they request of you. Good luck!

Sincerely,
Rick Arvielo
President

Learn the secret to getting your own Mod! click here

Listen to what New American Funding has done for it's Clients - Click their names to listen to their testimonials.

Joseline Tiburcio - We saved her $700 per Month!

Emilia Carbajal - We saved her %40 off her current Loan!

Karl  - We saved him $138,000 off what he owed!

Eduardo Garcia - We saved him $400 on his payment!

Walter and Deborah Taylor - We saved them over $76,000 and $800 per month!

Jeff and Linda Serben - We reduced their payment by $500 per month!

Gwendolyn Lacy - We got her interest rate reduced from 10% to 3% for 2 years!

Roseline Rodrigues -We saved her over $900 per month!

Mike Rochinich - We negotiated $55,000 off of his loan!

Debra Hoyte - We saved her $717 per month!

Luis Cirino - We saved him $60,000 & $700 per month!

Marcella Goodall - We saved her $500 per month!

Marrion Fay - We saved her a whopping $1104 per month!

Donald Skinner - We saved him $12,000 and $500 per month!

Edith Hill - We saved her $350 per month!

Mr. Halbert - We saved him over $74,000!

Allen Coats - We saved him $400 per month!

Fran Duhaylonsod - We saved her over $900 per month!

Josephina Luciano - We saved her $700 per month!

Martha Luciano - We saved her from Foreclosure!

Paulo Deoliveira - We got her out of a high risk loan!

Debra - We reduced her payments by over $600 per month!

Suzan Jaroch - We got her a payment she could afford!

Calvin Croom - We saved him from losing his home!

Kelly Welch - We reduced here payment from $2000 to $933 per month!

Danny Olivares - We saved him $400 per month!

Bruce - We saved him over $260,000!

Collin Scott - We saved him over $116,000!

Ronald - We cut his payments from $2,800 to $1,900 per month!

Since the early 90’s your Fico score has been a standard component of home lending decisions in the United States.  Fico became less significant during the ever increasing property values of the 2000’s as the rise in property values served to get many borrowers out of trouble with their payment obligations.  As everyone now knows, that house of cards/or unabashed risk has come crashing down.

 

Did Fico tell the story?

 

You need only glance at this attached graph to see the answer.  The odds of a borrower becoming delinquent on their mortgage go up over 100 times from a sub 600 score to a 700+ score.  That is huge!  Now the banks are looking at this data with renewed interest.

 

Even with FHA which basically doesn’t acknowledge Fico in their qualifying by allowing “delegated” underwriters to decision borrowers manually irrespective of the score are finding little opportunity for borrowers with sub- 600 Fico’s.  Why?  It is due to the systemic roadblocks (see last weeks post).  Major lenders are simply refusing to accept these borrowers which make FHA’s desire to provide financing to those that might otherwise qualify irrelevant.

 

Curious contradiction.

 I find myself puzzled by the telegraphing being done by the industry which suggests that a borrower need be in default before they can receive attention from Loss Mitigation and default prevention opportunities given the fact that by doing so you will destroy your chances for a new loan as your all important Fico will be adversely impaired.  Fannie Mae’s own guidance suggests “At least two full monthly payments of principal and interest (P&I), taxes, and insurance (or P&I only if taxes and insurance are not escrowed) are due and unpaid”, before you qualify for help. So here we have a landscape where you will likely need to destroy your credit worthiness in order to receive the interest rate reprieve some most desperately need regardless of your intent.  

That is truly a shame!

 FICO credit bureau risk scores made available at all three major US credit reporting agencies — BEACON^sm at Equifax, EMPIRICA® at Trans Union, and the Experian/Fair Isaac model at Experian. (1991)

D

 

Rick Arvielo, President of New American Funding, talks about one of the reasons why many homeowners are facing foreclosure.

Irvine, CA (PRWEB) September 18, 2008 -- Rick Arvielo, President of New American Funding, a mortgage bank that specializes in home loan solutions for troubled borrowers through FHA, talks about a growing issue that isn't receiving much press and is costing people their homes. The issue has to do with Second Trust Deeds holders refusing to re-subordinate behind a new FHA loan, which locks borrowers into their current First Trust Deed with escalating payments.

 

Arvielo says, in order to appreciate the magnitude of this situation, consumers need to understand the market from 2005/2006. A very popular product during that peak in the mortgage industry was the 80/20. That is an 80% First Trust Deed attached with a 20% Second Trust Deed or, 100% financing. This was a very popular loan in the Sub Prime category, where the borrower would receive a favorable rate for a two-year period on the first Trust Deed (TD) and then the interest rate would increase aggressively.

Arvielo observes, "The problem now is we are in a declining market, so these 100% loans are currently at 110% or higher. In many cases we can qualify the borrower for a new 30-year fixed FHA loan on the First TD, bringing their escalating interest rate down and fixing it in the 6% range. We can do this because FHA currently allows the combined loan total to be over 100%. The problem is the Second TD holders are refusing to subordinate, which locks the borrower into their First TD that often times has increased to 9% or higher."

"The only explanation I can come up with for the subordination denial is that FHA requires mortgage insurance, which serves to increase the new first TD amount. Even though the ultimate outcome is the borrower's monthly mortgage expense comes way down, the second TD note holder sees the first TD balance going up, so they turn down the subordination. Or, even crazier, the bank has policies in place that they won't subordinate over 100%, even though they are already over 100%."

When this happens, Arvielo says the future is grim. The borrower, who already owes more than the house is worth, is trapped in a loan where the interest rate is adjusting to unmanageable levels, which literally forces the borrower out of his home.

Arvielo says the solution will require government intervention. One avenue he suggests would be to approve stripping the second TD from the title when it could be proven there isn't enough equity to support the lien. That threat, he says, would likely be enough to get the note holders to cooperate.

Arvielo says this problem is getting worse and receiving surprisingly little press. He urges regulating agencies take action before more people lose their homes.

About Rick Arvielo and New American Funding
Rick Arvielo is President of New American Funding, a mortgage bank that specializes in home loan solutions. New American Funding is committed to providing top quality service. The company offers a wide range of loan programs that are competitively priced. Using the latest technology, the company has made the borrowing process simple and convenient. New American Funding offers competitive rates and eliminates fees associated with a loan arranged through a broker. The company's loan consultants listen to clients' needs and make sure they understand completely, then discuss the options and make sure clients thoroughly understand them. From application through funding, New American Funding makes the loan process simple and convenient. For more information, please visit http://www.newamericandirect.com/.

Media Contact:
Rick Arvielo
President of New American Funding
1-800-426-5626
http://www.newamericandirect.com/

Rick Arvielo, the President of New American Funding, says many homeowners are finding themselves trapped in their loans.

Irvine, CA (PRWEB) May 27, 2008 -- The President of New American Funding, Rick Arvielo, says there is a 'Perfect Storm' brewing when it comes to borrowers qualifying for a new home loan, but unfortunately, this storm is blowing people right out of their homes. He says to truly appreciate where the average mortgage holder is going, it’s important to understand where they have been.

 

 

There simply is no new loan for these people

FHASecure and the proposed FHAModernization will help, but unless someone comes up with a solution to declining values and the Debt to Income dilemma, it will fall well short of heading off this pending doom. We are already talking to thousands of borrowers that are desperate and disqualified due to these issues.

According to Arvielo, qualifying for a loan one year ago couldn’t have been easier. Stated/Stated 100% financing for Subprime borrowers meant buyers didn’t have to qualify from an income or asset perspective and they could borrow 100% of the value of their loan. Investors were saved because homes were worth more six months later. Borrowers in trouble could bail themselves out with a new loan. Now, declining values coupled with yesterday’s loose lending guidelines and high Loan to Value’s have borrowers stranded without a new loan option as their loans race towards unmanageable interest rate resets. "There simply is no new loan for these people," says Arvielo.

Arvielo goes on to state, "The only solution is for someone to spearhead an effort to organize the current note holders of these loans and create a streamlined work-out opportunity for lenders to work on the borrowers behalf to qualify them in a ‘what if’ scenario. Considering some debt forgiveness or providing seconds to accommodate the shortfall would circumvent the ultimate outcome of taking the loans back. I am sure these current note holders would gladly consider this option. There is plenty of pent up capacity within the lending community to conduct the qualifying diligence."

Arvielo observes, when the borrower’s loan resets and they stop making payments, the scenario is grim for everyone. "The borrower’s credit and dream of homeownership is ruined. The foreclosed property becomes a blight on the neighborhood furthering the declination of value which casts other borrowers into this same dilemma and the note holders fare worst of all. Typically, they have to evict and foreclose, then rehab and REO, paying full commission on a reduced fire sale price. The 'All-In' cost can easily climb to 50 or 60% of the note. And, with an unprecedented volume of foreclosures, the lenders ability to assimilate these houses serves to push out the cycle, leading to mounting losses for them and prolonged degradation of the neighborhoods."

Arvielo says FHA is being touted as a bailout option. "FHASecure and the proposed FHAModernization will help, but unless someone comes up with a solution to declining values and the Debt to Income dilemma, it will fall well short of heading off this pending doom. We are already talking to thousands of borrowers that are desperate and disqualified due to these issues."

To further the pain, Arvielo observes, major investors are now imposing their own Fico overlays to FHA. "FHA has long maintained that Fico isn’t used to determining eligibility. Unfortunately, major large investors, upon which the industry relies to sell their loans, are now imposing their own restriction to things like Fico scores, which serves to further the entrapment. Borrowers that qualify but also have lower Fico scores are out of luck and out of options. And, in many cases forced out of their homes," says Arvielo.

"At New American, we are doing what we can to qualify borrowers interested in FHA financing. And, for borrowers trapped, we are working to negotiate with their current investors to alter their existing notes to free the borrower. We have had success doing so with several loan servicing companies. Our hope is that the industry can get together and agree on a protocol to work this out or increasing foreclosures will certainly be the result."

About New American Funding
New American Funding is committed to providing top quality service. The company offers a wide range of loan programs that are competitively priced. Using the latest technology, the company has made the borrowing process simple and convenient. New American Funding offers competitive rates and eliminates fees associated with a loan arranged through a broker. The company’s loan consultants listen to clients’ needs and make sure they understand completely, then discuss the options and make sure clients thoroughly understand them. From application through funding, New American Funding makes the loan process simple and convenient. For more information, please visit http://www.newamericandirect.com/.

Media Contact:
Rick Arvielo
President of New American Funding
1-800-426-5626
http://www.newamericandirect.com/