A loan modification is a permanent change in one or more terms of a home loan. The loan modification process allows the loan to be reinstated and can include an interest rate reduction, a longer loan term, principal reduction or a combination of all three. A successful loan modification should offer the homeowner an affordable and sustainable monthly loan payment.
TopThere are many solutions available to homeowners falling behind on their payments. Most people think bankruptcy in the only option, short of just letting the bank take the home. There are many consequences to either action. While "Short Sales" are becoming more common, it still requires that you leave the home. Many lenders have workout options available, but want you to "catch up" all the missed payments. Obviously this is nearly impossible for most people. There is one option that will allow you to keep your home, reduce your payments, and potentially reduce the principal balance due on your home. Loan Modification is a HUD approved workout solution becoming more common during this foreclosure crisis.
TopMost lenders will either waive the late fees, and in some cases, allow you to include any outstanding amounts into the new loan. Always ask for a complete breakdown and description of all fees and penalties from your lender-some fees may not be justified and should be waived.
TopYes, the lender may conduct a review if they deem it necessary during the loan modification process.
TopYour lender will look for to approve your loan modification if proof of your ability to afford the new loan payment now and in the future. You will need to provide your bank financial statements and usually proof of your income, such as pay check stubs, bank statements, etc.
TopYes, most lenders will now accept loan modification applications from homeowners who foresee a problem meeting their home loan payments. The Federal government is urging lenders to proactively reach out to homeowners who face potential default. The loan modification process allows homeowners to apply for a loan modification without being currently delinquent.
TopEach home owner's situation is unique, generally lenders consider: divorce/separation, death of a spouse or borrower, illness/medical bills, military service, loss of job/income to be acceptable reasons to consider a loan modification. A well written, compelling hardship letter included in your loan modification application package is very important so your lender will understand your current circumstances and intentions.
TopYes, generally your missed payments can be added to the new loan balance and then spread out over the term so you can then afford the new loan payment.
TopOur company charges a fee for gathering, reviewing, transmitting and communicating the needed information, we work closely with your lender in obtaining and processing your loan modification. You can work with your lender directly with no fee but our services are designed to streamline and take the confusion and complications of the process away from you. There is no title, escrow, or appraisal.
Top There are many reasons we could provide but perhaps an example would be more effective:
When you are on the phone with your mortgage company and they tell you there is nothing that can be done for you, how do you know if this is the truth or if it is simply what the representative chooses to tell you as a result of their inexperience or apathy? These representatives aren't sitting in an office of their own, thinking about what a great career they have. The mortgage company representatives you will deal with work in call centers - a low-paying, high-turnover field of employment. Our negotiators have more experience in mortgage retention than most any of these representatives, do you?
How many financial transactions are as important to the average person as their home? Much like in any important matter, having the proper guidance and representation can make all the difference in the world. It can save you time, trouble and money.
In most cases it takes 60 to 90 days. However, 120 days is common with lenders who are backed up like Washington Mutual, Countrywide, etc. The trend lately has been much quicker with negotiated terms and modifications in 30-45 days. It is important to remember that each loan modification is unique and the time varies based on who your mortgage lender is and what your hardship details consist of.
TopOne of the first steps with our loan modifications is to contact and notify your servicing lender that we are representing you and demand they cease harassing you. It often takes up to thirty days for your lending company to acknowledge our settlement or loan modification requests.
TopNow more than ever, mortgage companies and banks understand that if they do not provide revised loan terms or settle for a portion of the debt to be paid that they will more likely than not get any money. Banking institutions are aware of the declining housing market. They know that at a certain point, they have to take what they can get. Most of them will settle very quickly, avoiding the cost of foreclosure and recovery actions. In the rare event that a creditor won't settle with our offer, they will return with a counter offer that will be favorable to you. There are many options to prevent foreclosure if you act soon enough.
TopAs borrowers fall behind in their payments, they can expect lenders to react in specific ways at specific times. Here's a look at the timeline from late payment to foreclosure.
| DAY 1 | It's the first of the month and the mortgage payment is due. The borrower misses the payment. |
| DAY 16-30 | A late charge is assessed. The company that processes the borrower's payments (called the mortgage servicer) begins to attempt to make contact with the borrower to find out why the payment is late. File is sent to the Collection Department. |
| DAY 45-60 | The servicer sends a "demand" or "breach" letter to the borrower pointing out that terms of the mortgage have been violated. The borrower is given 30 days to resolve the situation by paying the delinquent amount. |
| DAY 90 Notice of Default |
Foreclosure proceedings start with a Notice of Default (NOD). The document is recorded at the request of the lender by the trustee and is recorded in the county in which the property is located. The recording of Notice of Default gives "Constructive Notice" to the public. After the recording of the Notice of Default, the borrower and junior lien holders are given proper notification and the borrower has 90 days to bring their account current. This period is referred to as the Reinstatement Period. |
| DAY 180 Notice of Trustee Sale |
If the borrower does not reinstate their account within the 90 day period, the lender will authorize and instruct the Trustee to record the Notice of Trustee Sale (NOS). |
| DAY 201 | After 21 days of the recording of the NOS, a foreclosure sale can take place at public auction. The property may be sold to a third party bidder or revert back to the lender for a specified amount. |
Here is an example list of hardships that lenders consider during the loan workout process:
- Adjustable Rate Mortgage Reset- Payment Shock
- Illness
- Loss of Job
- Reduced Income
- Failed Business
- Job Relocation
- Death of Spouse or Co-Borrower
- Divorce
- Marital Separation
- Military Duty
- Medical Bills
- Damage to Property (natural disaster or unnatural)
Our loan modification team consists of attorneys and loan modification consultants. While a loan modification can be accomplished without counsel from an attorney, borrowers should keep in mind that the loan they now have was done without an attorney looking out for them. A loan modification can be considered a "new" loan, because there will be a new contract signed. This new contract will have new terms and new payments. These new terms and new payments should be completely understood by the borrower. Our team will fully and accurately explain the new loan terms and payments.
TopNope our primary goal is to modify the loans (promissory notes secured by a deed of trust [in california]) attached to the homes.
Top