What Is A Mortgage Modification

Mortgage modification is an option that has been helping homeowners save their homes from foreclosure. In fact, it is the most popular option that homeowners and their lenders are using right now. Lenders are overwhelmed with requests for modifications besides dealing with pre-foreclosure short sales and foreclosure sales. So rest assured they really don’t want to foreclose on your home. They would rather work out a loan modification or other option with you. Foreclosure costs them money and time.

Homeowners have been complaining the last couple years that their lenders were not cooperating or the loan modification process was taking too long. The good news is there is something you can do to get your lender to give you a quicker response and shorter turnaround time. By hiring a loan modification/debt settlement company to assist you, you can speed up the modification process and you don’t have to deal with your lender any more. The modification specialist can handle the entire process for you from beginning to end and keep you informed along the way. No more harassing phone calls, letters or notices. You can direct your lender to communicate with your loan modification specialist so you don’t have to be upset. 

Lenders are difficult when it comes to giving loan modifications. They just need to be assured that you are serious about keeping your home and making your new payments. When you work with a loan modification company, they can put together all the information your lender requires to make them comfortable with your financial situation and your ability to pay back your modified loan. Years of training and skills enable a loan modification specialist to handle any lender objections that may come up regarding your ability to repay your loan. The specialist can help you prepare the right documents so there are no mistakes and delays.

It is possible to negotiate a modification on your own, but with a loan modification specialist working for you, there is no reason to do so. Since you only get one chance at obtaining a modification, why mess it up? An expert modification specialist has established relationships with lender loss mitigation departments and their negotiators. Since you are not an expert at loan modification negotiations, you may not know who to speak to or where to send your paperwork, and your modification may never get to the right department.  Delays may cause you to lose precious time and you could even lose your home to foreclosure. There is no reason to stress yourself out and make costly mistakes when you can hire a loan modification specialist to do all the work. Also, your lender will take your loan modification request more serious if you have a professional negotiating on your behalf.

Once your specialist has your lender’s attention, the ball starts rolling in your court.  Your lender will assign a negotiator to your case. Your specialist will be in constant contact negotiating the most favorable terms for your modification. Keep in mind that there are different types of modifications. Your specialist will choose the right one for your particular financial situation so that your payments are affordable. You can expect a lower interest rate and a longer loan term. Some lenders will forgive the arrearages or add them to them to the back end of your loan, while other lenders may even reduce your principal. You can be assured that your loan modification specialist with fight for you to get you the best terms possible.
Your specialist can also refer you to an attorney who can do a forensic loan audit for you to determine if your lender violated any lending or disclosure laws at the time they made your original loan. The attorney will interview you to find out whether your lender or mortgage broker pressured you into any particular loan products, offered one product and switched it for another or did not explain all the costs associated with your loan. If the audit reveals any violations by your lender, the specialist and your attorney can use this information as leverage during the negotiations.  Lenders would rather negotiate a solution with your specialist than risk being reported for violations and be subject to fines and penalties.

The government is on your side as well. The past year or two the government has been putting a lot of pressure on loan servicers and lenders to work with their borrowers to prevent more foreclosures and further housing declines. It’s been a slow process getting the lenders on board, but progress has been made this year with the government’s HARP (refinance program), HAMP (loan modification program) and HAFA (short sale and deed in lieu of foreclosure program) to help more owner occupied primary residence homeowners obtain refinancing, a loan modification, short sale, deed in lieu of foreclosure or forbearance by streamlining the process and offering monetary incentives to all parties for participating in the programs.  The programs are voluntary and both you and your lender must participate. To be eligible, you must meet the program guidelines. Your loan modification specialist can explain them to you and advise you if you qualify for one of the government programs. Even if you don’t, your loan modification specialist will be able to find a program that meets your needs.

The worst possible choice you can make is to do nothing or walk away from your home. In fact,     Fannie Mae just released new restrictions against homeowners who can afford their mortgage payments and are upside on their mortgages and choose to just strategically default on their mortgage by walking away. Homeowners who use strategic default or don’t complete their loan modification workouts won’t be able to get another Fannie Mae mortgage for seven years from their foreclosure incident. Also, Fannie Mae will pursue a deficiency judgment in states that allow them for the difference between the foreclosure sale proceeds and what you owe on your mortgage balance. To avoid this unpleasant situation, all you have to do is work with a loan modification specialist who can negotiate with your lender a loan modification or some other alternative to foreclosure. Protecting your most valuable asset isn’t that difficult if you know where to turn for help.