The latest hot topic in the real estate business is Loan Modifications.  Homeowners need to be very cautious because a lot of unscrupulous businesses are springing up that offer consumers help with their loan modifications.  They charge homeowners a pricy fee of $3,000 or even more to do what you can do for yourself.

I've heard some folks claim that lenders are intentionally making loan modifications confusing.  Some think it's an effort to discourage applications.  If you're considering a loan modification, the first thing you should do is pick up the phone and call your lender to find out if you qualify. If you do not qualify, and can no longer afford to make your monthly mortgage payments, then perhaps you could consider a short sale, which is something I can help you with.  Give me a call and we can see if it is a good solution for you.  Many lenders are placing a moratorium on foreclosures, so this will give us some extra time to get your home sold.

The criteria for a loan modification is tight. Many banks insist on the following qualifications:

• Existing loan origination date prior to Dec. 31, 2007
  
• Existing subprime loan (fixed or adjustable) or Option ARM
• Loan-to-value ratio above 75%
  
• Owner occupied as primary residence
  
• Employed homeowner
• Existing mortgage payments exceed 31% of gross monthly income.

If you qualify for a loan modification, here is a list of the typical documentation you need to provide to your lender:

• 2 years of W2's
• 2 years of tax returns
• Financial Statement that lists assets and liabilities
• Last 2 pay stubs
• Hardship letter

Don't pay a company to do for you what you can easily do for yourself!

If you are successful, a loan modification may give you:

• A lower mortgage balance.
• An interest rate between 2% and 4%.
• A loan term of 30 to 40 years.
• A low monthly mortgage payment.
• Elimination of negative amortization and a waiver of prepayment penalties and fees.

If you have any questions please give me a call.  I will do whatever I can to give you the information and support you need to achieve the best possible outcome.

Janna Rankin Scharf, AB, GRI, CSP, CNS, CLHMS, provides a superior level of real estate services to home buyers and sellers in Coeur d'Alene and Kootenai County, Idaho. Visit www.JannaScharf.com to search for homes in the Coeur d'Alene MLS for anywhere in spectacular North Idaho.

Janna Rankin Scharf, 208.651.9700  NorthIdahoJanna@gmail.com