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Foreclosure Aid 911 assists homeowners in trying to obtain a Loan Modification FREE OF CHARGE, with their paid services for a Forensic Loan Audit.
What is a "Loan Modification"
Consumers, now have several options to preserve home ownership in order to avoid foreclosure. If one option does not work try the other. One of those options is a LOAN MODIFICATION.
A LOAN MODIFICATION is NOT a refinance of your mortgage(s). The simplest way to explain it is that generally your current mortgage will restructure your current mortgages principal amount, rate and term (years) to a more affordable mortgage payment based on your current income status. Your lender will consider doing this in order to possibly avoid proceeding with a foreclosure.
Even though you do have to qualify with sufficient income (you can not be unemployed), your credit is not a factor at this point. The lender will qualify you based on all of your debts, including your utility payments (electric, gas, water, gasoline, etc.) and will even consider income from other people that live in the house - all income must be documented. Generally they will require for you to produce:
- The last 2 years Tax Returns, including W2 Forms if you were employed (vs. self employed).
- The last 2 month's bank statements for ALL your bank accounts.
- The last 2 paystubs from your employer.
- A Hardship letter in which you explain your current situation as to why you have fallen behind in your payments. (Click here for a SAMPLE Hardship Letter)
- A list of ALL your monthly expenses - this is different than when you first qualified because this list will include all your utility payments and other expenses that you may have. (Click here for a Family Monthly Budget to be filled out)
More than likely, any past due mortgage payments, foreclosure and attorney fees, will be added to your current mortgage balance, but possibly lower your mortgage interest rate and even extend your loan to 40, possibly 50 years in order to lower your payments.
A LOAN MODIFICATION is a good option for many, generally your lender will not charge you for a Loan Modification; however, remember that when dealing with the bank yourself, you are dealing with their representative -- who do you think their representative is pulling for? Even though, YES, they must make sure that you qualify for a loan modification, they will not show you all the options that you have to make it work and more so, they will not necessarily get you the most favorable terms.
When you have someone on YOUR side, with proper representation you get a more favorable deal. Normally you will have to pay the costs for this type of loan modification and usually the cost is added to your loan modification. Foreclosure Aid 911, Inc. will assist you with your loan modification FREE OF CHARGE once your forensic mortgage audit is paid in full. The forensic mortgage audit is what gives you the leverage needed.
Mored detailed LOAN MODIFICATION Information
1. You can recast your current loan into different terms, with the hope to benefit from a lower interest rate, which is fixed rather than an adjustable interest rate.
2. The costs of the loan modification are rolled on the "back-end" of the loan, which will increase the amount of money you owe.
3. The loss mitigation department may choose to keep the amount (that you own on your loan) higher than your current home value. Or they may choose to lower that amount, some, but not as much as it could be to make your new payment comfortable in the long term. This could mean that you may be in financial jeopardy, in the future.
4. It's a fact, what cause your current lender to be interested in keeping your loan on their books are the servicing rights. They make money servicing your loan over the term of the amortization schedule. The problem is that many lenders have filed for bankruptcy or just got out of the business (due to poor credits markets) and the servicing rights have been sold to other investors. This often causes a strain, since; the servicer does not actually have your loan documents at their facility, so they rely on others to get your original loan information to them for review. This process can cause the loan modification workout to be slow, in many cases. Timing is very important, since, homeowners are not knowledgeable in the process and they often wait to late to get the loan modification process started. It is important to communicate with your current lender and get the loan modification process stated, months before your home goes to foreclosure sale.
5. If your request for a loan modification is rejected, you may want to try it again in a few months, since; some lenders don't document the loan modification attempt you made. They are often motivated by changes in the housing market and their intent changes as more and more loans go into default. It does not hurt to try again. It is smart to work with a loan modification specialist, a seasoned loan officer or an attorney who specializes in real estate, mortgage lending and loan modifications. They understand how to speak to loss mitigation department, personnel and can get a general idea of the mood and trends of your lenders loss mitigation department.
6. Many loan modification specialist work together with attorney firms to get the loss mitigation departments to act in a timely manner. Those same attorney firms work with the loan modification specialist to make sure the original loan documents are not fraud ridden. This is a good approach, yet it can cost the homeowner additional money, since both the loan modification specialist and the attorney need to be paid for their services.
7. Homeowners are required to pay the loan modification specialists and attorneys for the services, provided. Many homeowners think that the cost will be included in the new loan amount, but this is not the case. Logically, lenders are already loosing money when they agree to modify the loan terms and conditions for the homeowner, so, you can bet that they will not agree to "package" the costs of doing the loan modification into the new loan. That cost is paid by the homeowner, directly to the loan modification specialist and/or the attorney. The cost can range between $1995.00 and $5000.00; as an average. Many loan modification specialist, senior loan officers and attorney firms can work out a payment plan, yet, many require at least 1/2 upfront before they start the loan workout. Understand, there is no guarantee that your loan modification or loan workout will be accepted. You will still have to pay your representation your agreed amount. A large percentage of loan modifications and workouts are accepted. So, it's a good bet, since, most people do not want to loose their homes to foreclosure.
8. Loss mitigation representatives, (most often) do not require you to pay for a new appraisal. Instead, they have your representative provide census track data, in today's market, more than likely a BPO (broker price opinion) will be requested by the lender at no costs to you.
9. If you are in foreclosure and costs have been incurred from posting your foreclosure sales data, attorney fees, title costs or other costs; you could be liable for those costs, if your current lender requires it (as a requirement to the loan modification).
10. Loss mitigation departments may choose to approve you for a new loan which is (another adjustable or tiered -fixed loan). Be careful. Do your homework or "talk-it-over" with your representation.
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