by Got a question on loan modifications or anything mortgage related? We’re happy to help and we’ll try to get you an immediate response. Common questions are here; scroll down to ask your own question or read questions that other homeowners have asked!
What is a loan modification?
A loan modification is an agreement between borrower and lender to help the borrower afford their home.
A loan modification, also known as mortgage modification or loan workout, can help homeowners achieve a lower interest rate, lower monthly payments, forgive legal fees, reduce the loan balance, waive unpaid late fees, convert from an Adjustable Rate Mortgage (ARM) to a fixed-rate mortgage, extend or shorten the duration of the loan, and stop the foreclosure process.
A loan modification is usually in the best interest of both bank and homeowner, as it allows the homeowner to make a lower, affordable payment, while helping the lender avoid losing money due to foreclosure.
Do I have to be late on my mortgage to qualify?
If your lender participates in Obama’s Home Affordable Modification Program, you do not have to be late on your mortgage payment to qualify for a loan modification, however you do need to exhibit documentation that shows that you will default on your next mortgage payment.
In many cases, you actually do not have to be late on your mortgage to qualify for a loan modification!
Often times, if you have a forensic audit performed and you can bring a lawsuit to bear against your lender or servicer based on legal violations, and give them the option of avoiding litigation by modifying your loan, guess what, most of the time, lenders will grant a very aggressive loan modification with far better results than possible through hardhip based loss mitigation techniques!
What is foreclosure?
A foreclosure simply put is when a lender undertakes legal proceedings to repossess a property that is in default. When a homeowner has not been able to make their mortgage payments for an extended length of time, the lender may feel that the loan has defaulted, and will attempt to take back the property. In a foreclosure, any equity that the homeowner has in the property is lost, and the homeowner has to immediately vacate the premises.
Can ModificationZoom get me a loan modification? Do you guarantee results?
We pride ourselves on being the very best Loss Mitigation Group you can possibly retain. Our Attorneys, paralegals and legal assistants, loss mitigation specialists, processors, and representatives are committed to fighting for the best possible results on your loan modification.
We stand behind our commitment to help homeowners with a 100% money back guarantee, and have actually helped over 100 homeowners modify their loans pro bono (for free).
On average, of each 200 cases that we accept, we will successfully negotiate agressive loan modifications for 195 applicants; we are over 97% successful in helping our clients save their homes.
I was told my Lender was doing everything they can to help?
Nothing could be further from the truth. For the second time in the last month, President Obama has summoned top CEO’s of the remaining major mortgage banks to the White House to explain in person why more mortgage loan modifications are not being done for struggling homeowners.
Additionally, Treasury Secretary Tim Geithner and Housing and Urban Development (HUD) Secretary Shaun Donovan have had to continuously put pressure on mortgage Banks to help homeowners modify their loans. Many State Attorney Generals have partnered with the FTC to sue mortgage servicers that are not granting loan modifications, and that have made a business practice out of putting homeowners in toxic mortgages.
Hold times for homeowners are particularly outrageous, as perfectly documented by Congresswoman Maxine Waters’ two-and-a-half hour long ordeal on the phone with Countrywide / Bank of America trying to help her constituents get loan modifications.
Mortgage companies simply do not have the man power to help all of the homeowners that they have screwed over. Recent pressure has been placed on lenders that have received TARP funds to hire more employees, and banks claim to have complied. Why then does it take so darn long to get on the phone with someone, and why, unless you are an attorney, do the lenders continuously claim to be unable to help!
Often times, lenders will place homeowners in loan modification or loan workout plans, or forbearance agreements in which the borrower ends up paying more that their original mortgage payment! How does this make any sense??
What is the loan modification process?
Complete a “quick-qual” application to the right. A ModificationZoom Certified Professional will contact you and help you prepare a financial prospectus, hardship letter, and advise you of what to expect through the loan modification process. Once we recieve your signed ModPack™ along with supporting documentation, our Attorneys and paralegals will contact your lender and begin the modification process. Typically, it will take your lender between one to two months to assign a negotiator.
Once a negotiator has been assigned, we negotiate on your behalf for the best possible results on your loan modification, keeping you advised through each step of the process. We offer unlimited negotiations with your lender, and will go back to the negotiating table as many times as necessary to get the results you need.
When we have concluded negotiations with your lender, a loan modification agreement will be sent to you to sign and send back. Upon singing of the loan modification agreement, congratulations, your mortgage is modified, home saved, and you are saving tons of money!
The loan modification process can be quite confusing at times, and naturally, you have questions about how loan modifications work. Answers to most general questions regarding loan modifications, loss mitigation, and loan workouts can be found on this page, but of course we are here to answer any questions that you may have. If you have a question that is not answered above, feel free to leave a reply and an expert will provide an answer shortly, or simply have a loss mitigation specialist call you directly by completing the “quick-qual” application form to the right.
We value your security and privacy. Read our
Yes I did a loan modification with my lender. I thought that under these Modifications that they were suppose to put behind payments at the end of the loan. Well I did end up with a lower interest rate but they tacked on 9,844.46 raising my balance from $125833.82 to $134094.44. because of the now I even owe more . My payment only went down $25.00 . PLEASE HELP ME. MY lender is Homeq servcing
1. When Asked why they said that I needed to pay the interest that I had missed on my payments. Well I thought that the Princple and interest was in one payment right? Well if that is the case the payments that I was behind on should have been in the regular balance not tack on to balance. Now in five years I will be right back where I started has of today still owing $ 125000.00. and my inerest rate will go back to adujusable rate. Now do you think that makes since what they did? They did not help me at all. when I asked they said they do not defer payments . Well do you think adding to someones balance helps!!!!!
Chelsea Dogie
Chelsea,
Homeq is a really tough lender to work with, however, we’ve had great success in wrestling aggressive modifications from them. I need a little more information to help you in detail, specifically the original terms of the loan, net and gross income(s), total expenses, etc. When the workout takes place, all legal fees, etc. that would have been assessed are to be removed, and usually, late payments are placed on the back of your mortgage.
I have to be careful what I say here because I in no way want to be accused of slandering Homeq, however, I will say that I have noticed that they seem to make a special effort to grant modifications that do not put homeowners in a significantly better financial situation. Shoot me an e-mail and I’ll send you the contact information for a negotiator that I’ve worked with extensively at Homeq to review your file, or if you’d like me to I can take a couple of minutes to review your financials and let you know where you might be able to make changes that will make a loan modification more appealing to your lender — justin@modificationzoom.com.
Thanks a lot . Very informative post.
This stuff is pretty simple and the results are outstanding.
After I signed up, my lender found a really good negotiator. We spoke about every possible situation and offer that we could think of and eventually picked the best one. The fact that I was informed of everything and was able to speak to both parties as many times as I wanted was amazing. We finally signed an agreement and now I’m saving a serious amount of money.
Loan Modification is the answer for struggling homeowners…I hope that the government can help all struggling homeowners.
This is really good stuff. I must say it is informative even for those who do not have the understanding of these technical terms and obviously these need to be explained in the easiest way, which helps.
Thank you! Loan modifications can be pretty complex and tough to get, however, we try to make things as simple and straightforward as possible.
Incredible post, very useful information!
I was told buy my lender that it will take up to 300 months before we get approved… rediculous we need help now!
It’s hard to believe that your lender would honestly say 300 months until your loan is modified! Typically it takes between 1-3 months to successfully modify your loan. I would have stated, I do not appreciate your sarcasm, this is a very serious and dire financial situation for myself and family, and I need to speak with your supervisor IMMEDIATELY, then used the misinformation as grounds to speak with a negotiator on the spot regarding your stats, got a direct line to fax your docs directly to that negotiator, and gotten my loan modified immediately.
Exploit and take advantage of everything that your lender’s reps say / do; regardless of your lender they certainly use all information you present on your financial worksheet / hardship letter against you to disqualify you for a loan workout!
The new Obama Program is proving to be very helpful to homeowners I think!
When doing a modification, how does it effect your credit rate/report?
Kim,
Good question and I’m glad that you’ve brought this up. Currently, a loan modification has little to no negative ramifications with regards to your credit scores.
It is important to remember that often your lender may not be inclined to work with you until you are actually late on your mortgage, in which case, those mortgage lates will have already hurt your credit score.
I think often times people intertwine loan modifications with credit repair or credit counseling (which is noted adversely on your credit report). There is no such annotation on your credit in the case of a loan modification.
A loan modification by definition is a change in one or more terms of your existing mortgage; hence, on your credit report it is still the same trade line merely with a lower payment and / or balance, with the same history.
On a side note, it is possible to get a loan modification without being late on your mortgage through the making home affordable program, as long as you can document that becoming late is inevitable. In this case, if you were to get a loan modification quickly, you could possibly avoid the damage to your credit that would occur from missing a payment, and achieve a the benefits of a great modification without any damage to your credit.
I hope this answers your question, if you have more questions feel free to follow up here or e-mail me directly at justin@modificationzoom.com
-J.
Really very nice and informative stuff here! You have done mind-blowing job by sharing such kind of stuff. Here you made the picture clear about Loan modification. Most of people do not know much about loan modification. You have covered most of question of loan modification here. There is no confusion now. Thanks for sharing such a nice and valuable stuff.
@Newport Beach Realtors; glad to hear that this helped!
Justin Bartlett´s last blog ..HSBC Loan Modification
Biggest is concern is the back-end DTI under the plan. Scenario: Laid-off, collecting umemployment of $1,800 per month. PITI is $1140 per month. Monthly expenses (including utilities, telephone, groceries) are $1180. What’s that equal – a B-E DTI over 70%? Granted a loan mod to 31% would reduce the payment to approximately $558; will the lender consider the “extra” $582 that can be applied to back-end DTI?
Jane,
I believe you are asking about the Making Home Affordable Plan; regarding your back end DTI – this really has no effect on how much your lender will lower your payment, however, you most likely be required to speak with a HUD approved credit counselor and draw up a plan to lower your back end DTI prior to rolling over to the permanent modification (most likely you will be placed in a 3 month trial modification plan with a 31% PITI payment). Make sure you actually speak with the counselor, document all correspondence, make your trial modification payments on time, and submit any and all required documentation (even if your lender already has a copy, RE-SEND EVERYTHING THEY ASK FOR!). Best of luck to you, follow up and let me know how things work out.