Borrowers Look For Mortgage Modification…
Homeowners who can’t afford their mortgage payments can get a better deal from their lender. However the process is complicated and concessions may only be offered to borrowers who meet the lender’s guidelines.
The payment must be affordable, but also pay off loan. An “affordable” payment is one that is no more 38% of the borrower’s monthly gross income. Some lenders use a lower or higher figure, usually between 31% and 41%. The new payment must be low enough for the borrower to make the payments, but sufficient to eventually pay off the loan.
Some lenders also require proof that the borrower has suffered a significant financial hardship. Such hardships include…. prolonged illness, disability, unemployment, divorce or death of a spouse.
Loan modification programs are about preventing foreclosures. They are not intended to create great investment opportunities. In most cases, while helping someone to stay in their home, banks are worsening that house (and others in the neighborhood) as an investment opportunity.
The best way to get started on your loan modification is to call the number on your monthly mortgage statement. That is a much better method than sending your request via e-mail or through an online application.
Borrowers should be honest about their finances because inaccurate information that can’t be documented will delay the process and could could result in a loan modification application to be denied. There is no upside giving us bad income or expense information.
Some borrowers will receive a loan modification offer, subject to verification of income, by the end of that first conversation. Others will need to wait for the lender to review their situation before they receive an offer or will be told their request has been denied.
If you feel too uncomfortable to contact your lender, you can call a mortgage counseling agency that’s certified by the U.S. Department of Housing and Urban Development, or HUD. To find a HUD-certified counselor in your area, call HUD’s interactive voice-response system at (800) 569-4287.
If you decide to contact a foreclosure specialist, keep in mind that many of these companies are scams and others don’t offer any services that you can’t accomplish on your own.