Loan Modification Requirements

Loan modification sounds intimidating to the average homeowner but the process is indeed simpler than you might think. We have tried to break it down in simple terms so you can better understand the process. Ultimately, a successful loan modification requires an agreement between the homeowner and the lender on the new terms of the loan causing both parties to become better off after the transaction. Below are what is required for each party.

For The Homeowner

Four elements must exist to make a homeowner a good candidate for loan modification:

• Desire to keep the house
• Owe more than the home is worth
• Experienced a financial hardship
• Are past due on payments

For The Lender/Servicer

Lenders and mortgage services each have their own loss mitigation departments and policies, but what is clear is that no lender wants yet another house to enter foreclosure, especially with all of the recent government incentives and assistance. As such, given foreclosure the alternative, as long as the homeowner can still make payments on the loan, the lender would be willing to work with him/her to prevent a foreclosure. Typically, lenders' requirements are to make sure that the deal makes fiscal sense. For example, they must determine that the revenue lost in lower payments on the loan would still be better than the cost associated with the foreclosure and maintenance of the home after it is given back to the bank. In certain situations, this really gets down to bad vs. worse for the lender, but as a general rule, it is always better to let the homeowner keep his/her home and not take the house back.

Are you a good candidate for Loan Modification?

Any homeowner currently stuck with an adjustable rate mortgage that has been or will be adjusting upwards is a premier candidate for loan modification. Millions of Americans were lured into signing up for interest only mortgage loans and while initially the loan was low and affordable, the double impact of rising interest rates and the inclusion of principal into the payment have caused borrowers to see their payments triple or even quadruple! The temporary one or two month forbearance your lender offers is a Band-Aid but not a bona fide solution to the problem that will get worse and the only way to halt the skyrocketing house payment and keep your credit intact at the same time is with the help of a loan modification.

Remember that waiting too long to get the process started may actually disqualify you from the program! Do not wait until your ARM or Interest-Only Loan resets again but instead act as soon as you realize that your financial situation is putting you at risk for foreclosure.

What happens during a Loan Modification?

During a loan modification the terms of your mortgage are renegotiated to bring the interest rate down to a percentage that fits into your budget and the monthly payment no longer presents a severe strain on your ability to meet your other financial obligations.

Why don't I simply ask my lender for a Loan Modification myself?

It would be great if borrowers and lenders had the ability to negotiate loan modifications, but the problem is two-fold: many lenders simply lack well trained loan officers who know how to negotiate and set up a loan modification in the first place; secondly, some lenders are more interested in recouping any potential losses up front via a foreclosure than they are in keeping a customer for a long period of time with the help of a renegotiated mortgage. In both cases it is the involvement of legal specialists that provide borrowers with the results they desire.

Is Loan Modification similar to Debt Consolidation or Refinancing?

The answer is a resounding no. Debt consolidation seeks to lump a group of unsecured debts into either a loan or a program that offers lower payments. It does not apply to mortgages. Refinancing a home requires the borrower to apply for a new mortgage for the home and as such will require a down payment, an appraisal, and a lot of fees for the lender. This is often not an affordable solution for a borrower who is already stretched to the max with the current mortgage payment and the existence of an adjustable rate mortgage that eats up a lot of the available funds on a monthly basis may actually be held against the applicant and thus causes the refinance application to be denied. Loan modification seeks to restructure an existing loan.

What is needed from me to get the process started?

Documents relating to your financial situation, income, and mortgage details help legal professionals to draft the papers your lender requires for a need based loan modification approval. Upon receipt, the terms of the mortgage are renegotiated to reflect a lower monthly payment. Best of all, the paperwork is handled in its entirety by the professionals in charge of negotiating the deal and you are not required to attend a closing or any such meeting.

How long is the Loan Modification process?

You will see relief in as little as two weeks or a couple of months if FHA guaranteed loans are involved. In the meantime, lenders are amenable to halting foreclosure proceedings and even the sale of a home! The added benefit of this process rests in the fact that you may be able to skip one mortgage payment and get back on your feet with your budget. Since the majority of reputable lenders prefer to have you remain a customer for life than selling off your home at a loss and thus not realizing the profit of the interest payments, the process is usually not delayed.

What are typical success rates?

Our success rate is stellar and our commitment to our clients is unwavering. With several professional and ethical companies forming our network of loan modification servicing firms, and decades of combined legal experience, your loan modification is in good hands and within 60 to 90 days you may be back on the road to fiscal health while having your good credit intact and keeping your home.

Is Your Lender or Servicer Not Helping You or Being Abusive?

Lenders and servicers are very busy with desperate homeowners trying to save their homes from foreclosure. Unfortunately, they do not have the man power or the capabilities to save everyone.

Many people are simply getting lost in the system and suffering an unnecessary foreclosure when they could have worked it out with their lender.

However, when a lawyer is involved, it seems as if the calls start to get answered and the letters responded to. Often this can make the difference between saving your home and losing your home. With Turbo Loan Mods involved, you have an important ally in your corner to get you the mortgage help you need, FAST!