Frequently Asked Questions
Q. What is a loan modification?
A: A modification is a change to the original mortgage terms. It may include a change to the product (an ARM to a fixed rate mortgage), interest rate, amortization term and maturity date, and/or unpaid principal balance. The change/s is made to create a more affordable payment for the borrower.
Q: What is a successful loan modification?
A: A successful loan modification is a modification creating a monthly mortgage payment that is sustainable for a troubled borrower by targeting a benchmark ratio of housing payment to monthly gross household income.
Banks, Are They Helpful?
Truth About Loan Modifications
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The simple truth about loan modification is that it is a difficult process. How you go about the process of modifying your mortgage is completely up to you.
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There is nothing that prohibits you from attempting your own loan modification.If you have the time, temperament, training, and talent to do so, then it may be to your advantage to do so. The fact is that you will probably spend several hours trying to reach the actual loan modification department since lenders tend to route their call through their collection department first. You will undoubtedly spend several hours on hold as our staff does, in order to speak to the person that sends out the forms. After you spend several more hours trying to decide what those forms mean and even more time on hold trying to get an explanation you are then ready to send your packet back in. Keep copies, you may have to do this more than once.
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Knowing What to Say And Who To Say It To Can Make Or Break A Loan Modification
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The icing on the cake is that when your lender finally does contact you. It may be the collection department again offering you a payment plan instead of a modification. If you do not know the difference you may resign yourself to higher payments, higher rates, or even a sizable balloon payment. All of this time you may still be receiving collection calls.
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Most Lenders Are Backed Up For Months Issuing Loan Modifications.
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With understaffed departments because of budget constraints, loss mitigation departments are on overload trying to keep up. When they have to deal with educating customers on top of assisting them it only compounds the problem.
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Waiting Too Long May Cost You Your Home.
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Many of our clients come to us after they have attempted a DIY(do it yourself) loan modification. Under the best circumstances they have not signed off on a paymenst plan that includes higher payments, rates, or impossible terms just to keep their home another few months. In the worst circumstances they have waited until only a day or two before their foreclosure sale date and we can do nothing for them but watch them lose their home.
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