Mortgage Loan Modification Tips For Success! Part 1
If you have been either trying to get your mortgage loan modification approved or you are considering applying for a mortgage loan modification, here are some mortgage loan modification tips for success!
1. Be certain that you need a loan modification.
Not everyone that thinks they need a loan modification really does. If the value of your home is within an acceptable range with the amount you owe on your mortgage, there are mortgage refinance loan programs available that you might be able to qualify for where you can dramatically reduce your monthly payment and/or avoid that dreaded adjustment that is scheduled soon.
2. Get started sooner rather than later.
My mortgage loan modification took the better part of one year, if you have a scheduled adjustment or balloon payment coming up get started quickly! Also, don't wait around getting ready to get started while your lender takes your home away! Your lender will start the foreclosure proceedings to preserve their bundle of legal rights to your property so if you get declined, they can move forward with the mortgage foreclosure process as soon as possible!
3. Know your options.
The making home affordable program that the federal government has developed is not perfect but it has the right intent, to help you stay in your home. By visiting making home affordable's website you can find out if your loan is owned by Fannie Mae or Freddie Mac, both of which have mortgage loan modification programs available. Please be willing to do your research, please be willing to take free help from counseling agencies that can advise you on the best course of action for you. In San Diego, Community Housing Works is one the best counseling and education sources I have seen on this topic. They are also a great source for information and to get your questions answered. The United States Department of Housing and Urban Development has a program known as the "hope now alliance" that can also help guide you in your research and experience.
4. Prepare and keep a detailed log of communication.
Mortgage lenders do not like to put anything in writing so it is up to you to memorialize your conversations with them. You need to note all of the following in your log:
3. Number dialed
4. Everyone you spoke to and in what order, include
5. Name and Title or Employee Number
6. Department you spoke with make sure it is loss mitigation not collections!
7. What was said by you and most important them!
8. Make sure that you review what you and they said on your last call.
9. Make sure to schedule each call weekly same day and time unless specified otherwise by them.
10. Remember the more detailed the better and make sure to escalate or request their supervisor if needed.
5. Check to see if your mortgage lender has a location or a scheduled event where you can meet with a loan advisor.
More and more large mortgage lenders are developing designated "Homeownership Centers" and/or "Homeownership Assistance Events" like Chase Mortgage where you can sit face to face with a loan advisor that can answer your questions and help you with the process.
6. Write your hardship letter and make sure you are accurate.
This is the hardest process to go through in a mortgage loan modification application package, it involves emotion, often times very painful emotion. Most applicants in the mortgage loan modification process have lived through setbacks, injuries, layoffs, trouble in their marriage, accidents, helping loved ones that are financially strapped and yet they have never had to sit down and write about it. It will potentially take a lot out of you, be prepared and go somewhere quiet and private to write the letter. Make sure to focus on what happened, events that were beyond your control that you could not have planned for ahead of time. Being accurate means if an event set you back last year but you held on for 11months making your payment on time out of your retirement account until it was dry, put those details in the letter. Please imagine who is reading this letter at the loss mitigation department of your mortgage lender, they have not been by your side this entire time so you have to fill in the blanks for them, you are the only one that can. Think of it as connecting the dots for them and make sure you do it, accurately. Just a quick side note, if you purchased your home or refinanced your home when the market was at its peak and you live in an area where home values have dropped, this is also an event that is beyond your control and you could not have planned for in advance. In some of our local areas here in San Diego County, the median home price has dropped more than 50% in the last 36 months. This is something to put in your letter as well. If you are not sure what your home is worth, contact your local Realtor and they will be happy to help you.
More to come in Part 2!