LOAN MODIFICATIONS: BUZZ WORDS TO MAKE OR BREAK YOU...PITFALLS, CONSIDERATIONS, KNOWLEDGE
I THOUGHT I'D PIPE IN ON THE TOPIC BECAUSE OF A FEW THINGS I'VE WITNESSED AS OF LATE THAT YOU MAY NOT ALREADY KNOW. I'D LIKE TO START BY SAYING THAT I AM A REALTOR IN THE STATE OF WASHINGTON WITH MY PRIMARY BUSINESS IN VANCOUVER, WA. I SPECIALIZE IN SHORT SALES AND HAVE DONE SO SINCE 2002. BECAUSE I WORK SO MANY SHORT SALES, MANY TIMES THE SELLERS I REPRESENT ARE EITHER IN THE MIDDLE OF LOAN MODIFICATIONS, HAVE ALREADY TRIED AND FAILED OR ARE CONSIDERING THE POSSIBILITIES WHEN I MEET THEM. I'D LIKE TO SHARE A FEW TIPS FROM MY PERSONAL EXPERIENCE.
THINGS TO CONSIDER IF THINKING OF TRYING A LOAN MODIFICATION:
#1 DO IT YOURSELF. IT ISN'T THAT DIFFICULT!!!
I CAN'T STRESS THIS ENOUGH. IT CAN BE DONE. YOU DO NOT NECESSARILY NEED A PROFESSIONAL TO HELP YOU. THE BULK OF THE WORK INVOLVED IS PROVIDING REQUESTED DOCUMENTATION SUCH AS PAY STUBS, TAXES, PROFIT AND LOSS STATEMENTS, BANK STATEMENTS AND OTHER FINANCIAL REQUIREMENTS PER THE BANK YOU'RE WORKING WITH. OTHER THAN STAYING ON TOP OF THAT IT'S JUST A LOT OF FOLLOW UP. CALL THEM AT LEAST ONCE A WEEK TO SEE HOW THE PROGRESS IS GOING. MAKE SURE THEY'VE RECEIVED ("IMAGED") THE REQUESTED PAPERWORK. MAKE SURE IT'S BEEN ASSIGNED TO SOMEONE. DON'T LET THEM LEAD YOU TO BELIEVE THAT IT'S BEING "WORKED ON" AND YOU DON'T NEED TO CALL AND FOLLOW UP. TREAT IT AS IF IT MEANS LOSING YOUR HOME OR NOT...BECAUSE THAT'S THE REALITY OF IT. DON'T BE PACIFIED.
THE ADMINISTRATION IS CONTINUALLY PUTTING MORE PRESSURE ON BANKS TO MODIFY MORE LOANS SO THAT THEY ARE AFFORDABLE TO BORROWERS. THE BANKS WANT TO HELP BECAUSE IT'S IN THEIR BEST INTEREST TO DO SO. IF THEY CAN GET YOU TO BEGIN MAKING PAYMENTS AS SOON AS POSSIBLE THAT MEANS THEY MAKE MORE MONEY...AND THEY ARE ALL ABOUT MAKING MORE MONEY.
#2 BE AWARE OF YOUR TIME LINE
WHAT DO I MEAN BY THIS? WHENEVER YOU STOP MAKING A PAYMENT TO A MORTGAGE COMPANY, A STOP WATCH BEGINS IN TERMS OF THE BANK TAKING NECESSARY PROTOCOL TO SECURE THEIR ASSET. THIS MEANS THAT THEY BEGIN THE PROCESS OF FORECLOSURE. THIS TIME LINE VARIES DEPENDENT UPON WHAT IS TYPICAL FOR THE STATE IN WHICH YOU LIVE. TYPICALLY IN THE STATE OF WASHINGTON LENDERS FORECLOSE NON-JUDICIALLY. THIS PROCESS TAKES ABOUT 7 OR 8 MONTHS FROM THE POINT AT WHICH A PAYMENT IS LATE TO THE POINT AT WHICH THE BANK WILL ATTEMPT TO SELL THE HOME AT A FORECLOSURE SALE. BUT AS I SAID, ALL STATES ARE DIFFERENT AND THIS IS SOMETHING YOU WILL WANT TO DETERMINE WITH YOUR BANK AS YOU ARE WORKING THROUGH THE LOAN MODIFICATION PROCESS. THIS WILL AFFECT THE SUCCESS OF YOUR LOAN MODIFICATION. IF YOU DON'T BEGIN THE MODIFICATION WITH ENOUGH TIME ON THE CLOCK SO TO SPEAK, YOU MAY NOT GET AN ANSWER ON THE MODIFICATION BEFORE YOUR FORECLOSURE SALE DATE COMES! THE BANK MAY POSTPONE YOUR FORECLOSURE SALE DATE TO ALLOW THE NECESSARY RESPONSE TIME ON THE LOAN MODIFICATION...BUT THIS IS NOT GUARANTEED BY ANY MEANS. BE CAREFUL AND ACT QUICKLY. TIME IS ONE OF THE FEW THINGS YOU'VE GOT GOING FOR YOU IN REGARDS TO THE PROCESS. DON'T LET IT SLIP AWAY WHILE YOU WAFFLE ON THE DECISION AS TO WHAT TO DO...
#3 DON'T GET RIPPED OFF
WITH THE UNFORTUNATE DOWNTURN IN THE ECONOMY, JOB LOSSES ETC. THERE IS A HUGE SWING IN THE NUMBER OF PEOPLE DEFAULTING ON THEIR MORTGAGES (OBVIOUSLY)...AND WITH THAT COME A TON OF LOAN MODIFICATION COMPANIES SOLICITING YOUR BUSINESS AND PROMISING THE WORLD. BE VERY VERY CAREFUL IF YOU DO HIRE A COMPANY TO DO YOUR LOAN MODIFICATION. DO YOUR RESEARCH. USE GOOGLE. FIND OUT WHO THESE COMPANIES HAVE HELPED. CALL THOSE CLIENTS DIRECTLY. A WORD TO THE WISE, IF YOU CAN'T SPEAK TO A PERSON THAT SUCCESSFULLY HAD A LOAN MODIFICATION COMPLETED BY THAT COMPANY TRY SOMEONE ELSE. REFERRALS ARE A GREAT WAY TO FIND A COMPANY...BUT DO YOUR DUE DILIGENCE JUST THE SAME.
BE VERY CAREFUL WITH COMPANIES THAT CHARGE YOU AN UP FRONT FEE. IN FACT, I'D RECOMMEND NOT HIRING SOMEONE THAT DOES. THERE ARE SO MANY FREE OPPORTUNITIES OUT THERE THAT YOU SHOULDN'T NEED TO. CASE IN POINT- I'D LIKE TO SHARE AN EXPERIENCE THAT HAPPENED JUST RECENTLY TO A FRIEND OF MINE IN WASHOUGAL, WA:
LIKE MANY PEOPLE HE GOT A LETTER IN THE MAIL FROM A LOAN MOD COMPANY PROMISING THEY COULD HELP ETC. HE HAD TWO HOMES THAT HE WAS HAVING TROUBLE AFFORDING BUT WAS STILL CURRENT ON BOTH HIS MORTGAGES. THE COMPANY RECOMMENDED HE STOP MAKING HIS PAYMENTS. THEY ALSO CHARGED HIM $2500 PER HOUSEHOLD TO DO THE LOAN MODS (HE NEVER CALLED ME TO ASK MY OPINION UNFORTUNATELY). MONTHS WENT BY AND NOTHING WAS BEING ACCOMPLISHED. TOWARD THE END, THE LOAN MODIFICATION COMPANY WASN'T ANSWERING THE PHONE. I GOT A CALL 4 WEEKS BEFORE HIS HOMES WERE TO BE SOLD AT THE FORECLOSURE AUCTION TO HELP HIM. THAT WAS 8 MONTHS AFTER HE HIRED THE COMPANY, AND 8 MONTHS AFTER THEY TOLD HIM TO STOP MAKING PAYMENTS. NOW MOST PEOPLE WOULD ASK..."WHY DID IT TAKE SO LONG FOR THE SELLER TO CONTACT SOMEONE FOR ASSISTANCE?". WELL THE ANSWER IS PRETTY EASY I THINK. HE WAS EMBARRASSED, ASHAMED, HIS TIME WAS SCARCE, HE KNEW HE'D MADE A MISTAKE AND HE KNEW HE'D BEEN RIPPED OFF. THE STORY HAD A HAPPY ENDING. HE CALLED THE BANK FOR HIS PRIMARY RESIDENCE IN VANCOUVER, WA, THEY WERE SYMPATHETIC TO HIS CIRCUMSTANCE OF GETTING SCAMMED. THEY POSTPONED HIS FORECLOSURE SALE DATE AND SUCCESSFULLY GAVE HE AND HIS WIFE A LOAN MODIFICATION THAT WORKED FOR THEIR BUDGET. HIS 2ND HOME (A RENTAL IN WASHOUGAL, WA)- WE DID A SUCCESSFUL SHORT SALE ON IT WITH THE RENTERS AS THE BUYERS. I GOT THE FORECLOSURE SALE DATE POSTPONED TO ALLOW THE SALE TO THE BUYER AND EVERYONE ENDED UP ECSTATIC! NONETHELESS, BE CAREFUL ABOUT WHO YOU WORK WITH.
#4 ARE YOU WORKING? 
REMEMBER THAT TO QUALIFY FOR MOST LOAN MODIFICATIONS YOU HAVE TO HAVE AN INCOME. THE BANK WANTS TO SEE THAT YOU'RE SOMEWHAT OF A SAFE BET TO CONTINUE MAKING PAYMENTS IF THEY EXTEND A HELPING HAND.
WHAT IF I DON'T HAVE A JOB YOU MIGHT ASK? CONSIDER SELLING YOUR HOME. EVEN IF YOU OWE MUCH MORE THAN YOUR HOME IS WORTH YOU CAN STILL DO A SHORT SALE. BANKS ARE FAIRLY UNDERSTANDING IN MY OPINION WITH SELLERS THAT CAN NO LONGER AFFORD THEIR MORTGAGES AND DON'T QUALIFY FOR A LOAN MODIFICATION. MOST OF MY SELLERS (IN CLARK COUNTY WASHINGTON) ARE RELEASED FROM THEIR OBLIGATION TO THE BANK WITHOUT ISSUE. THAT BEING SAID, YOU CAN'T JUST WALK AWAY FROM YOUR HOME BECAUSE IT'S DROPPED IN VALUE. YOU'RE EXPECTED TO ABIDE BY YOUR FINANCIAL OBLIGATIONS AS BEST AS YOU CAN. BUT IF A HARDSHIP CATCHES YOU BY SURPRISE, MOST BANKS ARE UNDERSTANDING AND WANT YOU TO SELL THE HOUSE AS BADLY AS YOU DO. IN FACT, IN SOME CASES WITH SHORT SALES IN VANCOUVER WASHINGTON, THE BANK WILL PAY YOU THE SELLER TO DO THE SHORT SALE...SUCH IS THE CASE WITH SELLER'S THAT HAVE FHA LOANS AND NEED TO DO A SHORT SALE! THE FHA WILL PAY YOU UP TO $1000 AID IN THE PROCESS.
I HOPE THIS LITTLE CHECK LIST HELPS IF YOU'RE CONSIDERING WHETHER TO DO A LOAN MODIFICATION OR TO SELL YOUR PROPERTY AS A SHORT SALE.
FOR MORE INFORMATION ON ME, MY BUSINESS, SHORT SALE ASSISTANCE IN VANCOUVER, WA OR SHORT SALE ASSISTANCE IN CLARK COUNTY WASHINGTON PLEASE VISIT MY WEBSITE: WWW.EXCELLENTNWHOMES.COM OR CONTACT ME DIRECTLY AT 360.521.7565. I'VE SPECIALIZED IN HELPING SELLER'S WITH SHORT SALES SINCE 2002 AND WOULD BE HAPPY TO OFFER ANY ASSISTANCE THAT I CAN IN DISCUSSING YOUR OPTIONS.
KEEP YOUR HEAD UP AND REMEMBER...TIME IS OF THE ESSENCE!
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