What is a Loan Modification?
A Loan Modification is a transaction in which the lender agrees to modify any or some of the terms of the mortgage. This is a process where an existing note is modified, but not cancelled. Changes may include: extending the term of the loan, changing the monthly payments, changing the interest rate, etc.
What is the difference between a Loan Modification and a Loan Workout Solution?
They are both repayment plans. A Loan Modification may be structured differently than a Loan Workout, but both help you repay your arrearages. A workout solution is any other plan other than a loan modification.
What is a Forbearance?
A forbearance agreement is when a lender allows a homeowner to miss monthly mortgage payments or pay adjusted monthly mortgage payments for a short period of time. Any unpaid interest or late penalties are normally added to the loan.
What is a Trial Loan Modification?
A Trial Loan Modification is when your lender/servicer puts a homeowner into a temporary loan modification while they evaluate you to see if you qualify for a permanent loan restructure. The temporary terms are usually for a period of three months.
Can you help me if I have been turned down for a loan modification in the past?
Yes. There are many reasons you may have been turned down. We may be able to turn the outcome around depending on why you were turned down. Many times it is because you did not present your situation in a favorable light to the lender and need to clarify the situation.
Will the principal be reduced on my mortgage?
Not usually. There are cases where an investor will give a principal reduction, but it is rare.
What is a Foreclosure?
The legal procedure by which a lender holding a mortgage on your house forces a sale of your house to obtain repayment of your loan. Foreclosure proceedings are typically started by a lender when you do not pay your loan on time.
If I receive a “Notice of Foreclosure”, how long do I have?
Time is not on your side. The sooner you act the better. Your lender will be more confident in your willingness to make payments on your mortgage if you deal with the situation immediately. A foreclosure process can take anywhere from a few weeks to many months depending on your state law and the method of foreclosure your lender chooses to take. Whatever the method, you need to take action quickly.
Can I negotiate with my Lender myself?
YES. Your lender wants to talk to YOU. Whether you hire an attorney, or anyone else, eventually, your lender wants to hear your voice. There are cases where you can do this yourself and then there are situations where by you want to be represented by an attorney. Each situation is different. Do not judge your situation or outcome by your neighbors experience with their lender. Every lender is different, just as is every homeowner.
How long does a Loan Modification/Loan Workout take?
Every lender is different. Some can take 60 days, others a year. No one can accurately give you this answer because your situation may be more complicated or less complicated than another. Your lender/investor has the final determination and if they are overwhelmed with borrowers it will take longer. How you present your file is a major determination in how long it will take as well. No lender wants to review a “messy” package.
What if I can no longer afford my home, can you still help me?
A loan modification is based on two things, can you afford the home in your current situation and what was the hardship that got you to this situation. If you cannot afford the home any longer then there are other options, a Short Sale or a Deed in Lieu may be options. If a Short Sale is what you want to do, then you will need to petition your lender to allow you to sell your home for less than what is owed. We can assist you with this option as well.
Do I need to be behind on my mortgage?
We never suggest you not pay your mortgage. Some lenders will work with you before you are late and others won’t, but we always suggest you make your mortgage payment to the best of your ability. If someone tells you otherwise, do not follow that advice.
Other’s promise results, what are your promises?
NONE. We do not promise anything other than we will give you the right tools to present to your lender. NO ONE can promise you certain results, only your lender/investor can. If someone promises you a certain outcome, do not believe them and do not hire them. An honest company will not make promises when they cannot control the outcome.
What do we have to do?
In order to receive a successful outcome, YOU need to participate in your own life. You need to follow directions and submit truthful documents and statements to your lender. You need to take their calls when they call you. If you have retained an attorney, you should give your lender their name and number when they call you. Your lender will want to talk to you. If you avoid them, you could jeopardize a positive outcome. Your lender may ask for certain documents several times, such as paystubs or bank statements, you need to supply them quickly. Most of all, you must have patience. This is a time consuming process and can be very frustrating. Your lender may request the same documents several times.
How do I know my best option?
You don’t, but we can give you the information you will need to help you determine what your best option may be during our consultation. Since every person’s hardship is different and every situation is different, there is no one answer to this question.
I am considering Bankruptcy, how will that affect my loan modification?
Every situation is different, but you can still file Bankruptcy and get a loan modification. Deciding which to do first will vary depending on your individual situation. We can work with your bankruptcy attorney to help you achieve both outcomes favorably.