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Frequently Asked Questions
What is a Loan Modification?
In simplest terms, a loan modification restructures the terms of a
loan without actually refinancing the property it secures.
Investopia defines a loan modification as an agreement between the
lender and the borrower which stipulates a long term relief from
untenable loan terms. Modification of a loan applies to the terms
governing the interest rate, the amount of the monthly payment, and
in some cases also the length of the loan. Skilled home modification
legal specialists work on behalf of borrowers with their lenders to
achieve the relief of a home loan modification via drastically
reduced mortgage payments.
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Are you a good candidate for Loan Modification?
Any homeowner currently stuck with an adjustable rate mortgage that
has been or will be adjusting upwards is a premier candidate for
loan modification. Millions of Americans were lured into signing up
for interest only mortgage loans and while initially the loan was
low and affordable, the double impact of rising interest rates and
the inclusion of principal into the payment have caused borrowers to
see their payments triple or even quadruple! The temporary one or
two month forbearance your lender offers is a Band-Aid but not a
bona fide solution to the problem that will get worse and the only
way to halt the skyrocketing house payment and keep your credit
intact at the same time is with the help of a loan modification.
Remember that waiting too long to get the process started may
actually disqualify you from the program! Do not wait until your ARM
or Interest-Only Loan resets again but instead act as soon as you
realize that your financial situation is putting you at risk for
foreclosure.
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What happens during a Loan Modification?
During a loan modification the terms of your mortgage are
renegotiated to bring the interest rate down to a percentage that
fits into your budget and the monthly payment no longer presents a
severe strain on your ability to meet your other financial
obligations.
Why don’t I simply ask my lender for a Loan Modification myself?
It would be great if borrowers and lenders had the ability to
negotiate loan modifications, but the problem is two-fold: many
lenders simply lack well trained loan officers who know how to
negotiate and set up a loan modification in the first place;
secondly, some lenders are more interested in recouping any
potential losses up front via a foreclosure than they are in keeping
a customer for a long period of time with the help of a renegotiated
mortgage. In both cases it is the involvement of legal specialists
that provide borrowers with the results they desire.
Is Loan Modification similar to Debt Consolidation or
Refinancing?
The answer is a resounding no. Debt consolidation seeks to lump a
group of unsecured debts into either a loan or a program that offers
lower payments. It does not apply to mortgages. Refinancing a home
requires the borrower to apply for a new mortgage for the home and
as such will require a down payment, an appraisal, and a lot of fees
for the lender. This is often not an affordable solution for a
borrower who is already stretched to the max with the current
mortgage payment and the existence of an adjustable rate mortgage
that eats up a lot of the available funds on a monthly basis may
actually be held against the applicant and thus causes the refinance
application to be denied. Loan modification seeks to restructure an
existing loan.
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What is needed from me to get the process started?
Documents relating to your financial situation, income, and mortgage
details help legal professionals to draft the papers your lender
requires for a need based loan modification approval. Upon receipt,
the terms of the mortgage are renegotiated to reflect a lower
monthly payment. Best of all, the paperwork is handled in its
entirety by the professionals in charge of negotiating the deal and
you are not required to attend a closing or any such meeting.
How long is the Loan Modification process?
You will see relief in as little as two weeks or a couple of months
if FHA guaranteed loans are involved. In the meantime, lenders are
amenable to halting foreclosure proceedings and even the sale of a
home! The added benefit of this process rests in the fact that you
may be able to skip one mortgage payment and get back on your feet
with your budget. Since the majority of reputable lenders prefer to
have you remain a customer for life than selling off your home at a
loss and thus not realizing the profit of the interest payments, the
process is usually not delayed.
What are typical success rates?
Our success rate is stellar and our commitment to our clients is
unwavering. With several professional and ethical companies forming
our network of loan modification servicing firms, and decades of
combined legal experience, your loan modification is in good hands
and within 60 to 90 days you may be back on the road to fiscal
health while having your good credit intact and keeping your home.
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