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.
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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.
I have tried every thing I can to work with my lender and its always the same no matter how I work it. I have the money to pay my bills even if there is only 18 dollars left or I am so far in dept that there is no way they can help me. In the mean time I see all these foreclosed homes just setting with nothing going on with them including the lawns not being mowed. I wounder how many Americans are in the same boat I am? Sure we can get you a loan that we know you will eventually not be able to pay. Then we can foreclose and get a quick buck from it. In the mean time we are just holding on to the money the gov has given us. No matter how you work with your lender there is no help your just a sorry SOB that can’t manage your money that you don’t have in the first place.
Hi Martin,
I’m sorry to hear about your frustration with attempting to reach a mutually beneficial solution with you lender. I’m sure there are many here that feel the same irritation with their lenders, and a good deal of the time, even I question lender motivations and the often seeming arbitrary denial of modification requests. The best advice I can offer is to fight the good fight and persevere- the more that you learn about loan modifications, the greater your ability to essentially tell your negotiator how to do their job – if you can present a well structure modification request in which you can show 1) that you qualify for the program through which you are applying (e.g. HAMP or an in-house loan modification) and 2) that it is fiscally in the banks best interest to modify, as well as 3) cause the negotiator to become personally vested in you achieving a modification either through sharing an emotionally wrenching story, or by making it clear that you will continue to pester them until your modification is approved, you should have no problem achieving your goals through a mortgage modification (within reason).
To answer your question regarding how many Americans are facing foreclosure and in the same position as you – the statistics are staggering – according to Realty Trac, 1 in every 411 housing units in America received notices of foreclosure in June, 2010.
Wishing you the best of luck. Stay diligent, persevere, and be sure you document everything your lender tells you!
Justin
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.
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
Informative, detailed post! Thank you for the information! I wonder how the B of A modifications announced yesterday (?) will actually work out.
i had a so called pro bono lawyer who was very weak, would not tell me the true inside any way we had been working on lowering our payments my wife had for one and a half years got this lawyer from florida bar assoc. could not even get our story straight after we documented any and all with everyone. we are not late just in a tight place and wantted our rates lowered by at least 400.00 a month any way after 4 months he through his hands up ;and said bank of america will not budge imagine that at one point my wife had worked a deal with the bank only to have them pull back my lawyer new this and could not act.now we are back to square one with no one or where to go i don’t think the obama plan will help unless you are in dier straights. we are self employed and followed all of the guidelines. i think the lawyer needed his volunteer time to get some grants.
I paid for a forensic audit that found 10 high severity issues and 3 medium severity issues with my loan documents. I was led to an attorney who is working to get a loan modification but the subject of the forensic audit findings have not come into play. He tells me this is for negotiation once he gets the attention of the lender (someone assigned) through the modificaiton process. It’s been 6 months with nothing coming from the lender but continued foreclosure threats as I fall farther and farther behind. My call to MMI verified that I’m not eligible for HAMP. I’m not able to reach my attorney in another state. Lender is IndyMac Bank now One West Bank who I’m told is extremely difficult to deal with. Can you help and how?
Steve,
I want to thank you and all the homeowners that stop by here on modification zoom; we’re undergoing a number of changes that (hopefully) will allow all homeowners regardless of skill level to take a loan modification from start to completion, completely for free, including the “qualification engine” that I’m currently coding (yes, at 2:21 am).
Regarding your forensic audit, first and foremost its very rare that forensic audits find tangible enough violations of RESPA and TILA to leverage your lender into granting a loan modification, and that classic line from your attorney stating that they will use it to negotiate a lower rate for you or better results is hogwash; having personally helped over 200+ homeowners save their homes for free, and personally attempting to use audits as leverage, I have not found this to be anything other than a last resort, and, simply put, unless you have grounds to rescind on the loan and make your lender painfully aware of the fact, your forensic audit will have little to no bearings on the outcome of your mod, until your attorney subpoenas your lender to court, which, facing foreclosure, you most likely do not have the money to pay his court costs should you lose.
Additionally, most of these “loan modification attorneys” are the scum, bottom of the barrel attorneys that couldn’t cut a living as bankruptcy lawyers, couldn’t sucker a scam debt consolidation company into using their bar license, or graduated from bad schools and couldn’t get a real job at a real firm. Title attorneys have more common sense and knowledge when it comes to real estate law and how to perform forensic audits; they mainly review HUD-1s and GFEs, but most will not touch modifications with a 10 foot pole.
The lenders know this.
(Sorry, much of this information is for other homeowners considering being suckered into a forensic audit) So… You have tangible violations, you’ve pretty much gotta take IndyMac to court to get them to modify on grounds of RESPA and TILA violations (I’m assuming).. Who do you turn to? Talk to your State’s Attorney General. These cases make great publicity for them and do wonders politically. I’m assuming from your email address your from Hawaii — if this is the case your AG is Mark Bennett, and his office can be reached at (808) 586-1500.
Explain your situation, and send his office a copy of your audit. Speak with him about options, and do your best to connect with other homeowners who’s loans have similar violations to yours. Convince him of the need to request from a judge a stay of foreclosure, at least until the investigation is concluded. Best of luck to you, and please pass our website along to a friend!
What’s the average cost for your loan modification services?
Hi there CJ,
$0.
Modification Zoom is in the process of converting to a 100% free homeowner help site; I personally spend hours of my time each day on the website and on the phone helping homeowners through answering questions and helping them modify on their own. I would refer more homeowners to Attorneys, however with the exception of a couple, I haven’t found any to be reliable, ethical, or diligent enough to deserve my endorsement. Loan Modification Attorneys are best utilized for foreclosure defense – and obviously are most effective if they practice law in the state in which the homeowner resides. The new website launches August 1st.
If you need assistance, feel free to give me a call at (202) 580-0637.
Justin Bartlett
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.