Loan Modification Series: PART 4 of 5 -
The 10 Most Common Questions About Loan Modifications
For many people trying to avoid foreclosure, the process of renegotiating their loan can be difficult to understand. If you are considering contacting your lender to attempt negotiations for a loan modification in order to avoid foreclosure, it is vital that you are adequately prepared and able to present your case in the best possible light, The process begins with gathering as much information upfront as you possibly can to insure a successful negotiation. I have compiled a list of the Top 10 Questions about Loan Modifications. This list will enable you to be better informed about the way the loan modification process works and what you should expect from it:
•1. What is a loan modification; Specifics please?
A permanent change to one or more of the original loan repayment terms of a home loan that will enable the home loan to be reinstated or revised, resulting in a new payment schedule the borrower can afford. This is known as a loan modification.
•2. Can I include late charges from the lender in the Loan Modification?
This will be dependent upon the type of loan you have. Late fees and other penalties may be waived by the lender at the agreement of the loan modification. It is important that you get a complete breakdown of all fees, and request an explanation in writing from your lender.
•3. Can the Bank force an interior inspection if the property condition is questionable?
Absolutely; Although an inspection or an appraisal is not a condition of consideration for a loan modification, should there be a need to verify that the property possesses no physical conditions that could adversely affect the value, the lender could conduct any review it considers necessary.
•4. How do I determine whether or not I will qualify for a loan modification?
The primary consideration on the part of your lender is going to be whether you have the ability to make the new modified payment, now, and in the future. You will be required to show proof of your income, together with a detailed financial statement representing your income and expenses. This will confirm to the lender that if granted the loan modification, you will be able to afford the new, repayment schedule.
•5. Do I have to be behind on my payments to get a loan modification?
There are many lenders who have begun accepting applications for loan modifications from homeowners who are not yet behind on their payments. Do not take no for an answer, be pro-active. I here many stories of borrowers calling their lender and being advised that they cannot offer any relief until they are behind in their payments. Ask to speak to a manager and get a referral to another division to discuss your case. More that likely, if a borrower can demonstrate to the bank that in the near future they will not be able to afford their payments, they will work with you on a modification.
•6. What constitutes a valid Hardship situation?
Lenders typically consider divorce or separation; the death of a spouse, co-borrower or family member; illness; loss of income; job relocation; or military service to be acceptable reasons to entertain a loan modification. Although each situation is unique in and of itself, a very important aspect of a loan modification application would be a compelling letter.
•7. Can I stop a foreclosure by applying for a loan modification?
Of course; that is the point of a loan modification. Negotiating a loan workout solution with your lender can bring your loan current and have the foreclosure process stopped.
•8. Is it possible to have payments in arrears added back into my loan modification?
Yes, past due payments can be added to the new loan principal and amortized over the life of the loan.
•9. Is it best hire someone to help me, or can I negotiate loan modification without help?
Due to the fact that most loan modification companies require a substantial fee upfront, it is important to consider your current financial situation, together with your comfort level in dealing with your lender. It can be a difficult and time consuming process, so keep the big picture in mind when making this decision. Regardless of the choice you make, your number one priority should be to learn everything you can about the process of loan modification. It is important that you educate yourself on what is involved in getting a loan modification application approved and what your legal rights are. A highly skilled, knowledgeable professional could help with this.
•10. What are the first steps to move forward with a loan modification?
Do your homework - learn as much as you can about the loan modification process before contacting your bank's loss mitigation department or a loan modification company so you can make informed decisions.
There is an abundance of information and resources available to help. The key to your success is Knowledge and understanding. We are here to help point you in the right direction.
Stay tuned for PART V of Loan Modifications - "Avoiding Scams When Looking for Mortgage Payment Rescue"
If you are interested in more information on loan modification, please feel free to contact me and I will put you in touch with one of my preferred Loan Modification Experts that specialize in successful loan modification transactions. Together we will assist you every step of the way. I hope you have found this information useful.
The Loan Modification Series:
Loan Modification Series part 1 of 5 - Big Solution to A Growing Problem
Loan Modification Series part 2 of 5 - Are the Bank Willine to Play?
Loan Modification Series part 3 of 5 - Can a Loan Modification Assist in Avoiding a Foreclosure?
Be sure to visit my website http://www.wisconsinloantips.com for more great information -
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