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A sub-prime mortgage is a mortgage that is extended to people who are not qualified to get the normal mortgage. Most of these mortgages are offered by the same companies that offer the mainstream mortgage but in a different lending institution. The rates for sub-prime mortgages are higher than the rates for prime mortgages thus; it is advisable to get a prime mortgage if possible. The main reason that makes one fail the qualification of prime mortgages is the credit rating where one gets a low credit score and they are rejected by the prime mortgage lender based on the assumption that the person is not able to service the prime mortgage.

The terms that are given for sub-prime mortgages include a small down payment and higher payment due to the higher interest rates and a longer payment period. The rates of sub-prime mortgages are raised to cover the risk that come with offering mortgages to people with low credit scores. There are chances that they might pay late or they might fail to pay if they do not have enough money to service the installment. The high mortgage rates are also meant to discourage borrowing of the sub-prime mortgage and this idea works since a majority of people accumulate their savings and get the prime mortgages.

The advantage of these mortgages is that they allow those people who have low credit ratings get the services that are usually accessed only by the people with high credit ratings. An additional advantage is that they have a longer repayment period and thus they are well suited for customers who would like to extend their repayment period. The disadvantage of these types of mortgages is that some of the people who qualify for mortgages are referred for sub-prime mortgages when their credit rating is low. The lending company determines one’s credit rating and whether one should be issued with a prime or sub-prime mortgage. This thus, leads to people who would otherwise have qualified for a prime mortgage being relegated into the sub-prime mortgage area. Additionally, this thus makes a person get one of these mortgages when mortgage lenders solicit them. They do not get a chance to consult prime mortgage lenders. Therefore, once these sub-prime lenders get solicitation commissions, they then carry out a process called ‘steering’.

The houses for which sub-prime mortgages are offered are not in good condition as those that qualify for prime mortgages. This arises from the assumption that when one has poor credit rating, they are not well up and thus they do not need a very expensive house. Sub-prime mortgage also face competition from prime mortgage lenders since the mortgage lenders offer lower interest rates. These lenders also offer customized mortgage programs. Most people who fall in the middle class or are associated with this financial status subscribe to sub-prime mortgage since when they apply for these mortgages they qualify. Most citizens cower from the mainstream mortgage, which they assume is for the wealthy. For this reason, people are advised to consult with the relevant people prior to taking up a sub-prime mortgage.



Defining the loss mitigation process:

For all practical purposes, loss mitigation can best be viewed as a powerful weapon that can stop your pending home foreclosure dead in its tracks. The loss mitigation process itself is without bounds, but always involves effective communication to be successful. If you are too stressed out about the possibility of foreclosure to represent yourself effectively throughout the loss mitigation process, then you need to employ a professional foreclosure consultant. They, like the loss mitigation teams employed by your mortgage lender, are experts that deal with these issues on a daily basis.

The loss mitigation process involves a set of tools that you as the homeowner are privy to. You can utilize these tools to achieve victory from a seemingly bleak situation. Negotiating with your lender, or having a professional foreclosure consultant to do it for you, is your ticket to retaining ownership of your home. Before we go further, please realize that millions of Americans are at risk of foreclosure even as you read this. Lenders appreciate a motivated homeowner who cares enough to communicate regularly with them and that tries to initiate positive plans of action to bring their loan current. Nobody wants you to lose your home to foreclosure.

The loss mitigation process can do more than just stop the foreclosure process; it can protect the equity that you have built up over the years in your home. With proper loss mitigation techniques employed, your lender will be more than happy to work with you and develop a plan for mutual satisfaction and appeasement. Loss mitigation involves a set of utilities that can stop a foreclosure. They include:

-Partial claims;

-An “In-Lieu” Deed of foreclosure;

-Forbearance agreements;

-Mortgage refinancing;

-Modification of your loan;

- And more…

The ultimate goal for all loss mitigation is to stop the foreclosure process and to establish a mutually beneficial plan for repayment of the mortgage loan including payment amounts and dates. However, nothing is set in stone and unless you are able to convince your lender’s loss mitigation specialists that you are a worthy gamble, they will still elect to go ahead with the foreclosure. Remember: their job is to minimize the losses that will be incurred by the lending institution – not to keep you in your home. If you are unable to thoroughly convince them that your plan is better for them than a foreclosure will be, then they will certainly foreclose. It’s just business in its raw form.

Stopping foreclosure is all about two things: loss mitigation and time. Once the foreclosure process begins, it seems that time cannot be slowed even for a second. The pressures continue to build and it can make you feel helpless – like there’s just no hope. But, there is! Consider having a professional foreclosure consultant assist you with your loss mitigation process every step of the way. It will save you time, money, frustration, worry, embarrassment and mistakes. It will also very likely keep you and your family in your home where you should be. Contact us at Stop Foreclosure Help Today and let’s discuss your possibilities.



Seniors today often live with a great deal of financial uncertainty. The retirement they imagined may not be consistent with the reality they face.

Incomes are flat or declining, living and medical expenses are higher than ever and few income boosting alternatives exist.  Even those who have heard about Reverse Mortgages may be unsure about how they work or what questions to ask. As they search for information, they often turn to their financial institution for guidance and information. By becoming familiar with the product, you can be an even more valuable resource to your clients providing them with income supplementing alternatives to drawing down assets.  

What is a Reverse Mortgage?

A Reverse Mortgage is a special type of loan that allows a homeowner to convert a portion of the equity in their home into cash they can access. The funds are not taxable to the homeowner and typically don’t interfere with eligibility for Social Security or Medicare benefits. (However, in the federal Supplemental Security Income program, beneficiaries must keep their liquid resources under certain limits.) The customer retains title to the home as well as right to any appreciation in home value when the loan terminates after it is paid off. The loan remains in force until the last titleholder dies, permanently leaves the home or sells the property; the borrower can’t be forced to sell or move by the lender. The loan may be repaid at any time. But unlike a traditional home equity loan or second mortgage, no monthly payments are required. Instead of putting further pressure on an already stretched budget, a Reverse Mortgage can free a senior homeowner of monthly debt obligations.

Most Reverse Mortgages today are Home Equity Conversion Mortgages (HECMs) and are FHA-insured and guaranteed. Because HECMs are subject to FHA lending limits, proprietary products have also been developed to help homeowners with properties in excess of the FHA lending limits.  

Who qualifies for a Reverse Mortgage?

All titleholders must be 62 or older and own a home with some equity. There are no income or credit qualifications. Existing mortgages or liens must be paid off, but are often paid with proceeds from the Reverse. The homeowner must also remain current on insurance and property taxes, but these can also be paid with proceeds from the Reverse.

How can a borrower use the money?

The funds can be used for any purpose from making ends meet to living retirement dreams.  The top reasons for funds used given typically by borrowers are:

Paying off debts, primarily mortgage and credit cards

Home repairs and remodeling

Living expenses

Travel

Health care or long-term care

Easing the financial burden on children

Education

Hobbies

Escalating property taxes

The amount available depends on the borrower’s age, the value of the home, interest rates and local FHA lending limits. Older borrowers can receive a higher percentage of their equity than younger borrowers. Funds can be received in a lump sum, a monthly payment or a line of credit.

What are the costs?

As with most any loan product, there are origination fees and closing costs, but they can be paid from the proceeds of the Reverse Mortgage. HECM loans also have a charge for the FHA’s Mortgage Insurance Premium (MIP). There are usually no out-of-pocket costs to the borrower.

What consumer protections are in place?

Reverse Mortgages are non-recourse consumer loans – the loan payoff can never exceed the value of the home. To get a Reverse Mortgage, the customer must attend a mandatory counseling session and review their financial situation with a trained, professional Reverse Mortgage counselor. Many of the counselors are certified by the AARP. The counselor ensures that they understand the transaction, the costs and their other alternatives.

If you have questions regarding Reverse Mortgages or how they may provide life-changing benefits to your clients, contact MLS Reverse Mortgage at 1-888-888-4834 or www.mlsreversemortgage.com.

Fixed Rate Reverse Mortgage

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