The loan modification process can be frustrating and confusing for distressed homeowners. If you are thinking about contacting your bank about a loan workout to save your home from foreclosure, you need to get as much information as possible so you will be prepared and able to present your case in the best possible way. Programs are changing and it is getting much easier for homeowners to get the help they need. To help you understand how the process works and what you can expect, here are some Top Questions and Answers:
1. What exactly is a loan modification?
A loan modification is a permanent change in the terms of a borrower’s home loan, it allows the loan to be removed from collection or foreclosure, and results in a cheaper payment the homeowner can afford.
2. Can my bank include late charges in the Loan Modification?
Federal guidelines mandate that the bank waive any administrative charges, late fees and penalties when offering a loan modification.
3. Will I be able to qualify for a loan modification?
The first criteria your benker is looking at is your ability to make the new modified payment now and in the future. You need to give your bank proof of your income, along with an accurate financial statement detailing your income and expenses to show them you will be able to afford the new, lower payment. You must also be able to demonstrate that you are facing a financial hardship-lower income or higher expenses for example.
4. What is an acceptable Hardship situation?
Each homeowner has a unique set of circumstances that caused them to fall behind on their home loan, but generally the banks consider divorce/separation, loss of income, death of spouse or co borrower, medical illness, job relocation, and service in the to be acceptable reasons to consider a loan modification. A compelling hardship letter included in your application is extremely important for a successful application.
5. Will a loan modification stop foreclosure?
Yes, that is the goal. By working with your lender to find a loan modification solution, your loan is brought current and the foreclosure process is halted.
6. Can my missed payments be added back into my new loan modification?
Yes, the arrears can be added to the new loan balance and spread out over the term to allow the loan to be brought current.
7. Can I do a loan modification myself or should I pay someone to represent me?
That is entirely up to you and your comfort level with dealing with your lender. Regardless of what you decide, the first thing you should do is learn all you can about the process, your rights, and what it takes to get your modification approved. An informed homeowner is harder to take advantage of and will have a much greater chance of success.
9. So how do I get started to modify my loan?
Before contacting your bank’s loss mitigation department or a loan modification company, do your homework-learn as much as you can about the loan modification process so you can make informed decisions.
You can get the help you need by contacting legitimate loan modification companies. Unfortunately, they are not that many out there. There are many scams out there today. Loan modification companies, that take money upfront and don’t deliver anything, thereby just making this worse.
Luckily, there are companies now sprouting up that essentially screen all of the loan modification companies, to weed out the bad apples. They then will refer to you, at no cost, one or more of the legitimate companies to help you with your mortage loan modification needs. Let them give you a free telephone consultation, and make sure they do not ask for anything money upfront. Click here now to submit you particular mortgage info and get a Free Consultation.
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