The loan mod process can be cause for much frustration for homeowners that are looking for help. If you are considering contacting your lender about a loan modification to save your home from foreclosure, you need to get as much information upfront as possible so you will be prepared and able to present your case in the best possible light. With the current economic crisis many lenders are gaining additional programs to help modify loans for their clients. To help you understand how the process works, here are the Top 10 Questions and Answers about loan modifications:
1. Can the loan mod include late payments that are due? Per HUD, the accrued late charges should be waived by the lender at the time of the loan modification. Lenders handle this differently, which is why it’s important to know the tactics of each particular servicer
2. What Is A Hardship? Each situation for each homeowner that caused them to fall behind on their home loan is different, but generally the lenders consider divorce to be acceptable reasons to consider a loan workout. It’s critical to include a complete and detailed hardship letter along with your loan modification request.
3. Do the new Government programs make it any easier to get a loan modified? The Federal government has allocated $75 billion dollars to subsidize lenders who offer a loan workout to their clients. The Federal Government is offering incentives to homeowners to modify loans and make payments on time. The short answer is YES
4. Can I get pre-qualified for a loan modification? In order to find out how likely it is that your lender will modify your mortgage it’s important to understand your financial situation. We must look at your income before being able to say with any certainty that we can get your lender to modify your loan. Often people try to make themselves look destitute which is not good because then the lender will assume you cannot afford any payment no matter how low. Also showing too much surplus of income will trigger the lender to think you do not need a loan modification. It’s important to strike a balance between the two
5. What is a loan modification anyway? A loan modification is a change in one or more terms of a borrower's mortgage note in the long term.
6. Is it worth it to pay someone to do the loan modification for me? You can definitely try to get a loan modification as a home owner, however, the success rate and negotiations for the best terms is not as successful as an Attorney negotiating on your behalf. The Attorneys know what can be negotiated and if need can do a site legal violations that force the banks
7. For a modification is it required to be behind on the loan? Most lenders are now doing loan workouts for their clients that are not behind, but who are able to prove to their bank that due to imminent interest rate increases, they will no longer be able to afford the loan payment under the terms of their loan. If you have some other type of hardship it’s important to be starting the process with your lender as early as possible
8. Can I Stop Foreclosure If I get a loan modification? The short answer is YES. The entire point of doing a loan modification is to get a homeowner into a payment that will be sustainable in the long term for their particular situation.
9. What happens to my arrearages? The payments you are currently behind on can be added to the back of the loan to bring you up to a current status.
10. Do I need An Attorney to negotiate better terms. A great example is that if you go to court, would you bring an Attorney, and the answer is yes. Again, the strength in negotiations is by far in the hands of an Attorney. The cost is minimal, less then a refinance and is recouped usually in two to three months.
11. What is the first step to getting a attorney loan modification? Definitely spend time educating yourself. Go to www.ripoff.com to see what Attorneys or Companies have been “black” listed! Do as much research and ask as many questions as possible. Do not feel rushed; if you’re talking to a modification company that is rushing you, it is a red flag. This about finding a Company that really cares about helping you and is in good standing.
You can get the help you need to find out if you qualify for a attorney loan modprogram by using our easy online application form. We will Find out if you meet the approval guidelines and how to increase your chances of getting a loan mod for you. Don’t waste any time since the further you fall behind the more difficult it will become to turn things around. Stay in communication and stay educated about your options!