What Is A Trial Loan Workout?

A Trial loan modification company is when your lender/servicer puts you as a homeowner into a temporary Mortgage Restructuring while they evaluate your paperwork to see if you qualify for a permanent Note Restructuring. The temporary terms are usually for a period of three months. In general, the Note payments should be less than what you are currently paying. Keep in mind that the trial Note Workout terms will not be the same as the permanent Mortgage workout florida cash out terms.

One thing that you have to watch out for is during the trial period you must make all of your payments on time. This is a standard condition of the trial period, else they will deny your request for a Note Adjustment and you may find yourself in foreclosure soon.

These types of temporary Mortgage Modification programs are all a little different depending on the mortgage bank and what state you are in. So I will provide a few more tips for those that are being offered such programs and these are general guidelines only.

One of the key expectations is the homeowner will receive upfront trail Mortgage Adjustment paperwork directly from the bank outlining all the terms before ever making a trial payment. You will need to sign the trial papers and send that plus the first trial payment back to the mortgage company.

While the trial period is moving forward, the lender will fully evaluate your Mortgage Modification package to determine if you qualify. If you are working with an Attorney, the full Mortgage Workout package would have been submitted to the bank prior to the trial period. In these cases, the reputable Attorneys already know you will qualify and it is a matter of giving the servicer time to evaluate everything.

For the most part, I think these trial periods are more of a stall tactic for the financial institution to get money from the TARP funds immediately instead of waiting for the permanent Note Workout program. Remember the permanent program terms take 60 to 90 days, and the trial period begins soon after discussions with the servicer. This gives the servicer money upfront and more time to stall and commit to a Mortgage Workout. Of course, the note holder are working in their best interest and not the homeowners.

If you have tried a Mortgage Restructuring on your own, usually the bank takes that information over the phone and later offers the trial Mortgage Workout. If this is the case, the process above is not always followed. In most cases, the servicer have verbally qualified you bases on a phone conversation or partial paperwork sent over by the homeowner. I would be very leery of any verbal commitments by the servicer, “buyers beware”.

Many times the homeowner never receives the upfront trial Mortgage Adjustment paperwork and is only going on a verbal by someone in the bank. Then after the trial period, they never receive any Loan Restructuring documents and find their home being foreclosed on. This happens sometimes in part because the lender verbal qualifications did not match up with the paperwork sent over by the homeowner during the trial period.

Unfortunately, the lenders are taking advantage of homeowners in this situation, in part because homeowners just don’t know what to expect or even demand. So, if this is happening to you, you know now what to ask for, and that is upfront trial Loan Restructuring papers and final permanent papers.

If you are not getting these papers as described, then I say buyer beware. You can contact a Mortgage Workout Attorney at that point or just ride it out and see what happens. Just a quick note on the Loan Restructuring Attorney, the reputable ones are almost 100% successful with permanent workout programs after the trial period, so feel confident that you’re in good hands.