The nature of loan modification is designed to favor the lender to lean more on the benefits of the borrower. It entails slight change of the loan terms as agreed upon by both the mortgagor and the mortgagee. Once the application has been approved, the lender will then offer a short term amortization with a reduction to interest rate of 3%-8%. Likewise, monthly payments will also be reduced as stated in the agreement and deal agreed upon with the lender. Most importantly, loan modification was created for the sole purpose of helping borrowers preserve home ownership.
Cons
Loan modification sounds like an appealing mortgage process, but that is not all there is to it. Qualifying for it is tedious. There are a lot of lenders who are unyielding to bequeath this request to just about any borrower. Since at the end of the day, this is still about money, mortgagees are not found to be generous to delinquent mortgagors who are in the pits of bankruptcy.
The fact that they wouldn’t want to take a chance on a client who can’t make the payments despite the modification is quite understandable. These lenders are strict in screening eligible candidates for loan modification. They really take time to filter applications by assessing financial documents and hardship letters conscientiously. Usually, only those borrowers who incurred delays in payments for a period of 2 to 3 months are granted this mortgage deal. The window of possibility for a loan workout would be bleak for a delinquent mortgagor despite a really valid hardship. The borrower’s credits may also take the greatest hit in this case.
The choices available to borrowers to salvage their properties don’t cover the whole spectrum. There is always a downside to any option related to solve money problems. It is still best to consult the expertise of a trusted loan modification practitioner in order to get the feasible and most favorable deal.To be eligible for the program, borrowers must have received a qualifying subprime mortgage or a pay-option adjustable rate mortgage prior to December 31, 2007.
Qualitfication for a Loan Mod
You can be automotically disqualified if your mortgage payments are on time.
Vacation and investment properties are automatically disqualified
Homeowner's must qualify with a 31% debt-to-income ratio with current lender (toatl debt divided by total income)
Homeowner must provide hardship letter
Full financial documents must be provided
Forensic Loan Audit
A Forensic Loan Audit is a comprehensive loan fraud/predatory lending investigation report which will identify infractions and violations committed by your lender and/or broker when they originally funded your loan. Obtaining an audit should be the first step on your quest to successfully modify your home loan. If you are behind on your mortgage payments, facing default or foreclosure the audit is a critical tool that will be used as leverage to argue your case with your Lender(s). Again, it will highlight the laws that were broken, if any, by your broker or by your lender. In almost 100% of the cases, we find violations in *RESPA, *TILA, and in some cases, egregious *Section 32 Predatory Lending violations." [RESPA = Real Estate Settlement Procedures Act. TILA = Truth-In-Lending Act. Section 32 Predatory Lending = This law is devoted to identifying certain high-cost, potentially predatory mortgage loans.]
Loans with illegal terms or conditions are not enforceable. Mortgage payments are not accepted during the foreclosure or litigation process. Lenders will choose the most rational and fiscally sensible response when presented with the legal facts. When facing their legal options: modifying your loan, foreclosing your home, paying some high-priced attorneys to litigate, or risk stiff federal fines and penalties, most lenders will choose Loan Modification as the most financially sensible option.
You are not alone in this nationwide financial crisis. Times are extremely tough for millions of homeowners like you and thankfully there many active laws and consumer groups to protect you. If you are having trouble paying your bills, your income can not support monthly expenses and ultimately are unable to make your mortgage payment(s), the good news is the Federal government and credit industry established loan modification services that will provide relief needed to keep your home. The main goal of a loan modification is to stop the foreclosure of your home. Foreclosures do not help or benefit anyone, not even your bank. An Attorney that specializes in loan modifications and debt negotiations is your best option to assist you in this process. An Attorney can make your Lender act on your case in your favor, and a forensic loan audit can only help to successfully restructure your loan.
Understand this fact, before you can effectively get your lender to modify your loan, YOU MUST KNOW WHAT VIOLATIONS ARE CONTAINED IN YOUR LOAN DOCUMENTS.
This is the key to obtaining a favorable outcome during the Loan Modification process. The factual and legal leverage you will get from a Forensic Mortgage Loan Audit will give you the best chance to get your loan modified.
To a large extent, these violations are the LEVERAGE used to argue your case against your lender. Generally, the more violations, and the higher their severity, the better chance you have of obtaining a loan modification.
So, if you are in foreclosure, the best way to stop your foreclosure is to get a loan audit, then get your loan modified.
Forensic Loan Audit Qualifications
You are behind on your payments
Are negotiating a Short Sale
Are negotiating a Loan Modification
Are upside-down on your mortgage
Are contemplating bankruptcy
If your value has decreased
If you are in an ARM or Option ARM loan/Negative Amortization
If your loan has adjusted, or about to adjust, your best way to modify your loan is to be amred with a loan audit.
If you simply cannot afford your payments, your best way to modify your loan is to be armed with a forensic mortgage loan audit.
