Getting a loan modification is not that easy. Even though the government is now making ways to help, research and statistics still suggest that a lot of people are still being left out. I guess it’s because of the mortgage lenders lack for better actions leaving homeowners in a bit of a problem.
Here are 7 steps to guide you towards a faster Loan Modification approval.
7 Steps To Get Loan Modifications Approved
1. Discuss how the borrower fell behind in his mortgage payments. If possible, provide a hardship letter (loan). What caused the borrower get into trouble with their mortgage payments? Be as detailed as possible. Was the monthly payment increased? Did your borrower loose his/her job or got sick on a lengthy time? Did you borrower just had a divorce or just lost a source of income to supplement the payments?
2. Express your borrower’s sincere interest and desire to keep his property and make modified payments in the future. Tell a story that will convince the lender that – with modified payments – the borrower will pay to keep their homes in a long term basis.
3. If available, make a list of the borrower’s attempts in selling the house.
4. Describe recent events that can help the borrower to make the modified payments. Was the borrower recently been hired or had a business opportunity? Has the borrower recovered from being ill?
5. Make a statement explaining how the proposed modification can help improve the lenders situation. For instance, without the modification, your client’s property may be lost through foreclosure, and the lender may have to take great losses by presenting to the house to the market.
6. List your expenses in correct details. This may be at number 6, but this is one of the most important steps to remember. The first few steps talk about the story, but now it’s time to go with the numbers. Your situation should also be backed-up and proved your financial situations by documenting your expenses and show how lowering the mortgage payment can change your situation and place you in a better financial position to repay the loan. Find out what makes you deserve a beneficial mortgage modification. Sometimes they would even help you and guide you on what to do and what they are looking for, then you can have your lawyers handle the paperwork.
Second mortgages are more likely to lose their position in a foreclosure auction. First mortgages always have the first claim on the money earned on sale. Bids are usually lower in rate when it comes to paying second mortgages of any of the proceeds. This means that they would rather offer you a lean modification option than get nothing with foreclosures. It could be that loan modification can save both your home and your credit. Therefore, finding out if getting one is possible is just clearly an understatement. Make a phone call, try to talk to anyone who can help, plead if needed, and see what the possible deals you are can get from your mortgage lender.
7. Important Step – Get A Free Copy of Your Credit Report for Validation
It’s very important to have a copy of your credit report to have documents to compare with your lender. It is a very true fact that the lenders credit report sometimes carries flaws and mistakes. This is often the problem because the lenders decisions on your approval of loan modifications depend highly on some variable of your credit report. A lender checking on your debt to income ratio for their decisions could make or break your chances for approval and the offered payment program. So having your own credit report could give you a defense in case false information is used for disapproval. And make sure your attorney get’s a copy as well.