Ten Common Inquiries In Regards To Mortgage Modifications
1. Describe a loan modification program?
In basic terms a mortgage modification program is a change in the terms of your current house loan that provides you a manageable and sustainable monthly mortgage. The loan modification process could include a reduction in the rate of interest, the loan term lengthened, and sometimes a reduction in the principle balance.
2. Why should a bank be willing to do this for me?
A mortgage company is willing to negotiate a loan modification process provided it serves their best interest. In other words, the lender will accept a loan modification on the condition that it is more cost effective to modify your house loan so you can afford to continue making your mortgage payments in opposition to the expense of filing for foreclosure. Banks are swamped with ever increasing foreclosure rates, factor in the on going decline in home values, the mortgage company will probably lose more cash filing foreclosure and attempting to sell your home than they would taking a loss on the loan. In addition, mortgage companies have to report to the FDIC if they have too many non-performing assets on the books, like foreclosed houses. For additional foreclosure information, go to http://www.loan-modification-masters.com.
3. How do I know whether or not I will qualify for a loan modification?
Like written previously, the mortgage company will do what it thinks is most profitable for them. Therefore, the number one factor considered by your bank is your ability to consistently make the new loan payment, now and in the future. It is imperative to show the mortgage company that according to your income and expenses, you are going to be able to sustain the new mortgage payment.
4. What is the best way to prove to my bank that I will be able to make the new house payment if they approve my mortgage modification?
You will have to give the lender with an accurate list of your entire income and expenses for each month. In addition you must calculate your debt ratio to demonstrate that your modified housing expenses (include insurance, HOA fees and taxes) do not go over a certain percentage. The precise percentage changes with every situation.
5. Can my missed payments be rolled into my mortgage modification?
It is an option, part of the negotiation process is to allow your missed mortgage payments added into the modified loan and averaged out over the life of the loan in an affordable payment structure.
6. Will I have to pay all the penalties and fees the lender has heaped on to my loan?
First of all, you have legal rights to a complete, detailed accounting of every fee and penalty. Also, depending on the type of loan you have, the bank may be required to forgive those penalties and fees. You need to educate yourself about your legal rights before you agree to the terms of a loan modification.
7. What happens if I owe more than my home is valued?
Believe it or not that may actually help you out. Ask a local realtor to provide a Comprehensive Market Analysis. This is a widely accepted report that substantiates the actual current value of your home. You can use this information to ask your bank to reduce the principle you currently owe as part of your mortgage modification.
8. Must I be employed to qualify for a mortgage modification?
Generally the answer is yes, you have to demonstrate to your mortgage company that you will have the money required to pay the new house payment. Should you have a VA or FHA loan, there are some loan modification programs that will provide you time to locate a job prior to resuming payments again. Foreclosure is halted during this time.
9. Since I don’t really know about mortgage loans, is it even likely for me to get a loan modification with my bank?
Banks would rather to give you a mortgage modification over foreclosing if it benefits them. However even though it may be in their best interest to give you a mortgage modification they don’t make it simple for you. Remember, their number one priority is for you to keep on paying your mortgage based on the original contract. So it certainly is a possibility that you do it yourself but be prepared for a lot of effort.
10. How can I get assistance with negotiating a mortgage modification?
At Loan-Modification-Masters.com we offer mortgage modification services. There are hundreds of places selling loan modifications but none offer the quality of service that we do. If you are looking for scam free foreclosure programs then Loan-Modification-Masters.com is The place to go. Stop by and visit us now to see how we can assist you in protecting your house.
Posted by Carlos Sagastume on December 8, 2009. Filed under HUD Homes.
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