Mortgage Loans Guide

The mortgage crisis has many homeowners becoming very anxious to get rid of a unaffordable home loan due to a number of reasons. Some solutions for homeowners are to either refinance or get a loan modification from their bank or lender. Since home values have been decreasing some homeowners simply walked away or were unsuccessful in modifying their home loan. Here are some valuable steps to get you the desired results in your favor.

1. How do I determine if I am eligible for a home loan modification? 

If you can show evidence to your lender or loan servicing company that you have experienced a financial hardship, such as an adjustable rate loan that is about to reset to a higher rate, plus you currently have the income to afford a lower loan payment if given the mortgage loan modification, you are eligible.

2. OK, what hardships are acceptable? 

Although each hardship is determined separately, the lender will usually consider these to be honored:  a death in family, loss of employment or less hours, relocation for work, medical problems (hospitalized, bills), divorce, separation.  Homeowners will need to write a hardship letter to the lender explaining their overall circumstances to the bank.

3. Am I eligible for a loan modification if I owe more on my house that it is worth?  This actually helps your case and should work in your favor, because a home value that is substantially less than the current market value will make the lender sway away from foreclosing as they could lose even more money approximately $30,000 per foreclosed home.  So keeping you in your house and making payments may be the best solution for all parties involved.

4. I have contacted my lender but they will not discuss my situation until I am behind on my payments?  Each lender has different policies for prioritizing their mortgage loan modifications. Most of the time homeowners who are confronting foreclosure are being assisted first.  However, many lenders are starting to communicate with borrowers who will face adjustable rate loan increases in the near future

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5. What about these mortgage loan modification companies claiming they provide me the best opportunity for a loan modification?  The majority of loan modification companies are new companies to get in on the start of the loan modification boom.  Since some homeowners are not comfortable dealing directly with their lender, or do not think they have sufficient knowledge to actually get the desired outcome, a loan modification company can represent you with an upfront fee.  Although certain state laws prohibit them from receiving an upfront fee if you are 3 months behind and in some cases two months behind. Some of these companies are reputable and want to honestly help you but don’t have the experience or proper personnel to get it done. As a rule of thumb, do your research on the company before you agree to anything and make sure to learn about the loan modification process so you can be ready to have loan modified correctly with the proper company.

6. What is a legitimate loan modification company?

A legitimate loan modification company is one which has an attorney in the office, where your file is being processed by experienced paralegals, not a “loan processor who is beginning a new career path”. Also, you should be speaking with a knowledgeable bank debt negotiator or they at least have one on their roster.  More importantly, use a company that performs a forensic analysis on your loan file for Truth in Lending and RESPA violations. Companies like these have usually been around for years.



By: Adam Matheson

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It is normal because nobody wants to lose his house or any other important material possession he might have. Thankfully there are ways now to avoid foreclosure and other degrading situations.

In many cases banks are quite eager to work out an effective solution with people who are completely off financially, simply because they are too. Loan modification is one of the ways that is suggested by experts and economists, as an effective way to deal with balances and clients who are behind their payments. It is known that foreclosures are not beneficiary for the banks; on the contrary, they try hard to find a solution to ease their clients so as that they can pay off their debts. It is much more beneficiary to lose a little money by modifying the terms of your loan rather than run a foreclosure and black list you. They will lose money that comes with the interests and they will lose a constant client. In any case the idea of foreclosing is something that banks today really want to avoid.

Mortgage loan modification is the change of the initial loan agreement and it doesn’t refer to refinancing. It’s all about the change of the initial terms of the mortgage that are simply not working for you any more, either because your financial status has changed or because the increased interest rates made the payment of monthly installments too hard for you.

You can call the mortgage lender and try to work out a solution yourself, or you can simply consult with an expert who can give you a useful insight on what is available today and what can help you deal effectively with the payment problems you have. Mortgage loan modification can be achieved easily when a professional does the job for you, simply because he has the necessary experience to deal with these problems effectively. Experts have the inside knowledge of the lending market and industry, thus, they are in a position to negotiate with lending institutions in a more effective way and achieve new terms that can make you afford your loan again.

No matter how hard is the situation, it is important to remember that you do have the option to modify your mortgage, even if you are behind. You can at try to act on the problem, rather than do nothing, because this will guide you directly to a foreclosure. Research your options and find out how you can save your home.



By: Richard Palms

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Here’s a list of loan modification do’s and don’ts to help you avoid common pitfalls.

Do know your rights.

More than 80% of mortgage contracts violate one or more lending laws—and most of them go unnoticed. But these violations can be your biggest weapon in the loan modification process. They can give you the leverage you need to negotiate with your lender and stop foreclosure. Your loan modification attorney can help you understand your rights and use them to get the results you want.

Don’t wait too long.

The foreclosure process is designed so that you have time to get back on your feet and save your home. But that doesn’t mean it’s safe to procrastinate. The longer you wait, the harder it gets to get you out of that fix. As soon as you decide you need mortgage help, call for a loan modification help and get started.

Do work with your lawyer.

Your Home Loan Modification doesn’t rest in the hands of your lender, your broker, or your loan modification attorney. These people can help, but you have to do your part and cooperate with your lawyer. Make sure to submit your paperwork on time, answer questions honestly, and give them a clear picture of your financial situation.

Don’t file for bankruptcy, unless you really have to.

Many people think that filing for bankruptcy can help them stop foreclosure. But data from the American Bar Association shows that it doesn’t work that way. In fact, 96% of the people who file bankruptcy end up losing their homes anyway—so they’re left with a foreclosure AND a bankruptcy on their records. In some cases, bankruptcy is still a viable option, but don’t make any decisions without getting professional advice.

Do have a backup plan.

Not all people will qualify for a mortgage loan modification. Maybe you’ve fallen too far behind, your lender may be simply hard to work with, or maybe you don’t need it after all. In any case, it’s always good to have a Plan B. Your mortgage modification attorney can help you find the best solution.

If you can’t get your loan modified, talk to your lawyer about a short sale. This involves selling your home for less than its fair market value and giving the proceeds to your lender. Although you still lose your home, it’s not as damaging to your credit as foreclosure, so it’s easier to get back on your feet.



By: Loan Modification Attorney

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