A Home Loan Modification is an
offer to make a permanent change in the borrowers mortgage terms
which is normally involves a rate modification. To find out if
you qualify or how to get help on a mortgage loan modification
there are plenty of attorneys and loan modification companies to
help consumers.To
determine if you are eligible the legal representative will
request certain documentation and ask you income and expense
questions. One will need to be in a hardship situation such as
job loss, dramatic reduction in income, divorce, death, etc.
many individuals opt to try and do the loan modification
themselves without the assistance of an attorney who knows the
laws, knows how to stop a foreclosure, knows what errors to look
for in the closing documents, and what is needed to qualify.
There are other companies out
there who claim they can do a loan modification and then
actually can't help the homeowner and find themselves even more
underwater since they had to pay that particular company a
processing fee. A loan modification, also called debt
restructuring, with an attorney can significantly make headway
for clients at a faster rate and faster responses. I have
personally witnessed people trying to save a buck here and there
and do it themselves. Yet, they discover six months later they
are still no closer to a modification agreement and are still
chasing down different office staff in the lenders office.
Some homeowners that are
struggling to make their mortgage payments or close to
foreclosure may choose to employ a real estate attorney or a
loan modification company rather than doing it ion their own due
to the fact that an attorney has a significantly more positive
impact and results, when ordinary individuals have failed. The
lender has to respond to attorney in a timely fashion otherwise
there are penalties, possible loan rescission, and expensive
legal fees. They don't want this in addition to a foreclosed
property. Once an individual fails to negotiate with the loan
servicing company, it is much harder to use an attorney later on
to stop a foreclosure due to time constraints and the lender
having your current information. Getting to the right person or
persons within the mortgage lenders' loss mitigation department
can be difficult to impossible at times. Some have stories that
their documents simply disappeared like the loss mitigation has
a magical genie on staff. Mail and faxes may suddenly become
misplaced, agreements moved to different departments, etc. Their
objective is to collect for their investors. You are not the
client to them. The investors are.
Remember the lender is mainly
trying to collect delinquent payments, not give you a break. The
loan loss mitigation area is not in the business of offering
each person that requests 3.00% fixed rate for 5 or 10 years or
reduce the principal loan balance down by $100,000. Although,
the odds increase when using qualified loan modification
companies with an attorney. If they are done at all, it is based
on the individual file and must be properly negotiated to
achieve positive results. When one uses the loan modification
services from a company that has an attorney on staff, they are
usually going to have a better outcome.
A loan modification is a long
term solution, modified forbearance agreements are designed by
the lenders to just get paid. Of coarse they will negotiate with
you to get caught up, requiring a portion of the late payments
to be paid up front to reinstate the loan or to stop
foreclosure.
Be Careful of Loan
Modification Company without an Attorney
There are many loan
modification companies also known as loss mitigation companies
marketing their success stories, refunds, and principal
reductions. If they guarantee a principal reduction, then you
need to do business elsewhere because that simply cannot be
guaranteed period. It may be a strategy within the loan
modification company's marketing but there is no guarantee!
If they say refunds, make sure they disclose the refund amount
if their processing department deems it not to be a favorable
file for a loan modification.
I will agree that not every
company out there is untruthful however most of the salesman are
working just to make a sales commission. You should work a loan
modification company that has attorneys, paralegals and
experienced bank negotiators to personally handle files that
come in.
What is a Typical Loan
Modification?
A standard loan modification
puts the borrower into a comfortable and long term ability to
make their new payment. Modifying the mortgage terms of the
current loan can involve a very low rate that is fixed for a
period of 3 to 7 years then systematically rise to the current
market fixed rates. In certain situations, the lender may also
choose to decrease the principal loan balance or wipe out part
or all of the second lien if it is introduce properly with
documentation. In summary, a loan modification should be
favorable solution to both the homeowner and the investor.
