Top Loan Modification Questions Answered

The loan modification process can be very confusing for many home owners. The confusion is in the fact that lenders do not have specific written guidelines when it comes to qualifying a home owner for a loan modification. If you are thinking about a loan workout to avoid foreclosure, you need to be as prepared as possible. The unwritten guidelines are changing daily. We have listed loan modification Top 10 Questions to help educate the home owner in these ever challenging economic times. What is a loan modification? A loan workout is a change in one or more terms of a borrower's home loan, allowing the loan to be reinstated, and results in a payment the homeowner can afford. This is not a refinance and credit scores are not taken into consideration. With the turn in the housing market, many home owners are finding themselves owing more then what their homes are worth. Being “upside down” is OK, when qualifying for a loan modification. Can I do a loan mod by myself or do I need to pay a professional? The loan workout process and unwritten guidelines are very different for each lender, there is no standard! When calling in to the lender, finding someone that will help is always a challenge. Without prior experience, be prepared to be passed around to people within different departments. The time commitment is on average 13 to 16 hours and the frustration involved is very real. Finding someone within the bank that really cares for the home owner is very difficult. Then there is the negotiations. Does this sound like an easy? I would have to say a big “NO”. It is more involved then getting the original loan, where a loan workout did all the work. Most loan mod also take 60 to 90 days and that is assuming there is contact with the lender on a very frequent basis pushing to get the modification reviewed! Hiring an experienced professional Attorney Back loan mod company, is very inexpensive for the results in monthly mortgage payment savings that the Attorney is able to negotiate versus the home owner. On average, the home owner can expect that the monthly mortgage payment savings will pay for the Attorney within 3 to 5 months. The Attorney has been negotiating thousands of modifications with the banks for years. The relationships with the Attorney and Lender is well established which offers a world of leverage to have the Attorney represent the home owner. The Attorney has the leverage and experience to get the very best loan workout compared to a home owner trying the process on their own with the lender. It is still important for the home owner to learn as much as possible about the process in order to find the right kind of professional help! Can I stop foreclosure with a loan mod? Yes, that is the goal! It is very tough for the home owner to spend the hours needed with the bank to stop the foreclosure. If a Notice of Default has been filled the chances of completing the loan mod is likely. If the homeowner has received a Notice of Trustee Sale and is 30 days or less from the Sale Date, contact an experienced Attorney Backed Loan Modification Company immediately! The home owner is at a very critical time and action needs to be taken immediately to stop the Foreclosure. It is unlikely at this stage that the home owner can stop the Foreclosure by working directly with the lender themselves. At this point, the Attorney is a must, as the work involved is time consuming and requires professional experience to work through the complicated process. Do I have to be behind on my payments to get a loan modification? Most lenders are accepting applications from homeowners who are not delinquent; however, the success rate for these modifications is not highly likely unless there is some type of hardship that has caused the home owner to be unable to continue to make the monthly payments. The hardship could be loan workout process. How will the new government programs help me get a loan mod? The Federal government has allocated $75 billion dollars to subsidize lenders and servicers who offer a loan workout to their clients. Now, the banks will have a monetary incentive to offer help to qualified borrowers. Unfortunately, these incentives are paid to the home owner’s lender whether or not the loan workout terms are actually based on your best interests. So, even if they only reduce your payment by $50 (or even if they increase your payment), they will still get paid. An Attorney-Backed loan mod can insure you receive the best possible terms that can be achieved. Can the lender include late charges in the loan modification? How do I know if I will qualify for a loan modification? In general, qualifying for a loan workout is really based on hardship, change in loan terms, and ability to pay the mortgage. What is an acceptable Hardship situation? Each homeowner has a unique set of circumstances that caused them to fall behind on their mortgage payment, but generally the lenders consider military service to be acceptable reasons to consider a loan workout. Can my missed payments be added back into my new loan mod? Yes, the arrears can be added to the new loan balance and spread out over the terms of the loan allowing the loan to become current. There are other options that can be negotiated and finding professional help is the best way for these terms to be negotiated as the banks will not “offer up” that information to a home owner. Remember, the lender is looking after their interest and not the home owners. http://www.callalms.com

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