Ralph R. Roberts Reveals the Top Five Myths About Loan Modification

 

Consumer Advocate Demystifies Common Misconceptions for Home Owners Facing Foreclosure

DETROIT--(BUSINESS WIRE)--Ralph R. Roberts, consumer advocate and spokesperson for Federal Loan Modification Law Center, today released a list dispelling the top five myths about loan modification. Intended to better educate homeowners facing the prospect of losing their home in foreclosure, the following list demystifies the most common misconceptions surrounding the loan modification process.

MYTH #1: My bank wants me out of my house. / My bank wants my home. Banks and other lending institutions do not want to foreclose. They earn more money if you can make your payments. When they foreclose, they not only lose your monthly payments, but they also have the expense of foreclosing (attorney fees), rehabbing the home, and then selling it (agent commissions). In today's market, there's a good chance they'll have to sell the home at a loss. This is all good news for you - it means the bank is highly motivated to make a deal with you.

MYTH #2: My credit score is bad so I won't qualify. Unlike the option of refinancing out of trouble, which requires you to apply for a new loan, loan modification simply adjusts the terms and perhaps reduces the balance of a loan you already have. Your credit score is much less of a factor in determining whether you qualify for a loan modification. In addition, a successful loan modification can actually improve your credit score over time, especially if it prevents you from ending up in foreclosure or bankruptcy.

MYTH #3 I am not late on my mortgage payments so I won't qualify. / I have to miss a payment to be eligible. Early on, this was true. In fact, some early eligibility requirements stated that you had to be 61 days delinquent in order to qualify. In other words, you would have had to have missed two full payments. The truth is that the eligibility requirements are constantly changing and differ among lenders. Many lenders are now working out loan modifications with borrowers who are up to date on their payments. It's difficult to determine whether you qualify until you actually discuss your situation with the lender or with an attorney who is knowledgeable and experienced in loan modifications.

MYTH #4: I would be better off walking away or declaring bankruptcy than modifying my loan. Walking away from the home and filing for bankruptcy are certainly two options, but they are rarely the best options when you are facing foreclosure. If you simply walk away, the lender is unlikely to pursue legal action against you, but in some jurisdictions, the lender can pursue a deficiency judgment against you to collect the difference between what the lender receives for your home at auction and what you currently owe on the balance of the mortgage. Filing for bankruptcy may be better than just walking away, but it can leave a blemish on your credit history that makes it difficult to borrow money in the future. A successful loan modification is almost always a more prudent choice.

MYTH #5: It's too late. I have already received a foreclosure notice. As long as you still reside in the home - that is, you didn't voluntarily abandon it, and the home hasn't been sold at a foreclosure auction - you may still have time to work out a loan modification with your lender. The sooner you take action, the more options you have available and the more time you have to pursue the best option, but you can still negotiate late into the process. By contacting the lender or, better yet, having your attorney contact the lender on your behalf, you demonstrate a good faith effort to work out a solution and can often buy yourself extra time to negotiate a loan modification.

About Ralph Roberts

Ralph R. Roberts is a consumer advocate and spokesperson for Federal Loan Modification Law Center. After losing one of his own homes to foreclosure in the late 1970s, Ralph added a foreclosure division to his real estate business. Since then, Ralph has led thousands of families through the foreclosure maze, informing them of their options, including loan modification, and steering them clear of the most common pitfalls while empowering them with the information required to get on with their lives. Ralph is also an experienced mentor, coach, consultant, and award-winning author and REALTOR®, who has penned several successful books, including Foreclosure Self-Defense For Dummies (Wiley) and Protect Yourself from Real Estate and Mortgage Fraud: Preserving the American Dream of Homeownership (Kaplan). To find out more about Ralph and loan modifications, visit www.KeepMyHouse.com, www.FlippingFrenzy.com. or

www.AboutRalph.com

Ralph R. Roberts, CRS, GRI
Loan Modification Expert/Author
Sterling Town Center Office
12900 Hall Road, Suite 300
Sterling Heights, Michigan
48313-1150
Office: (586) 751-0000
Fax: (586) 620-6449
Email: RRnail@Gmail.com
Personal Assistant: Lois Maljak (LoisMaljak@RalphRoberts.com)

Ralph Roberts is the author of many books:
- Flipping Houses For Dummies (Wiley Publishing)
- Foreclosure Self-Defense For Dummies (Wiley Publishing)
- Advanced Selling For Dummies (Wiley Publishing)
- Protect Yourself from Real Estate & Mortgage Fraud (Kaplan Publishing)
- Mortgage Myths: 77 Secrets to Save on Home Financing (Wiley Publishing)
- Foreclosure Investing For Dummies (Wiley Publishing)

Ralph also maintains Websites and Blogs:
- www.RalphRoberts.com (Ralph's real estate company)
- www.FlippingFrenzy.com (Ralph's blog about Real Estate & Mortgage Fraud)
- www.AboutRalph.com (Where anyone can learn more about Ralph)
- www.GetFlipping.com (A resource for house flippers)
- www.KolleenRoberts.com (a tribute site to Ralph's daughter)

Remember every job is a self-portrait of the person who did it. Autograph your work with excellence.  --Anonymous