Loan Modification Part 2

Ok, so what is a Loan Modification (Loan Mod as know in the industry)?

A loan modification is much like a mortgage refinance in that the objective is to find you a more affordable mortgage payment for your financial situation. Or a permanent change in one or more of the terms of a mortgagors loan, it allows the loan to be reinstated, so the home owner can afford it.

TIP:

Hire an attorney firm working in this kind of situations.

How do I start the Process of a loan modification?

You can hire a Loan modification company, attorney, realtor, mortgage broker, do research online. But I think the first thing to do is to contact your mortgage company, it is amazing to me that there are thousands of delinquent borrowers who never have to courage to just call and talk to their lender, you will be surprise of the result if you do so.

Do not spend too much time with the customer service rep, or give them explanation, ask for the Loss Mitigation Department. Once on the phone with the Loss Mitigation Rep, get their full name, position title, get their direct number, this will help you on your follow up. Don’t be too aggressive, be friendly but firm, don’t give them excuses come up with some ideas of how you can repay the loan back, have a plan even if you think it will not work, it show that you want to solve the situation.

TIP:

Keep a log of all phone calls, date, promises, etc…You need to over-communicate to them that the problem is serious and needs immediate attention.

They will ask you some personal but basic questions. Be HONEST, you want to be frank in your assessment of your financial situation. If you are the eternal optimist now is not the time to be upbeat about your financial wherewithal. Within the bounds of honesty you must show that you are in a bad financial place, but you could afford to keep your home. You most prove that a modification is going to improve your situation to a point where you will be an acceptable risk for them.

WHATS NEXT

If your situation qualifies for a loan modification you will be receiving an information package with a worksheet to calculate your monthly expenses. Keep in mind that most lenders have not set-up processes to handle the high volume of loan modification. This can lead to request being bounced around or even lost until it is too late to avoid foreclosure.

Today there is a lot of pressure for banks to modify loan terms and keep borrowers in their home. If you look at the current housing market and the declining home values, lenders are finding that performing loan modifications is more financially attractive than the expenses of foreclosure.

What does the bank need from you?

The bank is in business to make money regardless of any situation, it is your objective in presenting your loan modification request is to show that it is in the best interest of the bank to modify your loan.

• You have had a material change in your financial circumstances
• You have mad every effort to make your mortgage payments
• You have been cooperative and responsive in working with them
• You are not in anyway purposefully defaulting to get a loan modification
• You are willing to be open, honest, and provide all necessary documentation
• You own and occupied the property as a primary residence
• Not filed bankruptcy
• Paid stub, bank statement, hard ship letter
• If using an attorney make sure he sent all documentation need it on his letter head, mortgage lenders will usually give more credit to letters from a law business than from a regular home owner or any other regular firm.

TO BE CONTINUE.....