There is a very wide variety of homeowners qualify for loan modification. With so many questionable loans being sold over the past few years, homeowners have more causes than ever for foreclosing. First off, you have Adjustable Rate Mortgages (ARMs) where the fixed term is up and the rate increases. The payment now becomes too much to afford. Many of these borrowers used stated income documentation to qualify, meaning that they could not truly qualify for the loan under normal guidelines. Once the rate adjusted upward homeowners who barely squeaked by in the past now have no chance at making their mortgage payments.
Others candidates for loan modification are victims of decreasing home values and now have no or negative equity. Property values are dropping at a record pace in many areas, especially those who saw extreme appreciation over the past few years. Many homeowners just see no benefit in trying to pay a huge mortgage payment when they are upside down tens of thousands of dollars and property values are still decreasing. In many cases the same house down the street is renting for half of a homeowners current mortgage. These borrowers might be eligible for a note reduction to market value. In some situations, you may be able to have your balance reduced substantially which also lowers the monthly payment. Why pay thousands and thousands of extra dollars just to save your credit?
Financial hardship is the textbook definition of a borrower who qualifies for a loan modification. This means that something happened in your life that caused you to lose money, lose the ability to earn money, get your wages cut or many other causes along those lines. Homeowners with a large savings account and plenty of income rarely qualify just because they are upside down on their mortgage.
LOAN MODIFICATION BASED UPON LOAN AUDIT ONLY
If violations are found on your loan documents often we can settle these violations without any other hardship.
If you are near foreclosure you have no option but to turn to modification. Most people facing foreclosure or NOD think that if they cannot afford their mortgage, how can they afford to modify their payment? The answer is simple: we can stop your foreclosure process and freeze payments. Once we have negotiated a comfortable settlement we will bring you current. That means that you will not have to make payments during this ‘investigation into the problem’ while your foreclosure does not progress. Most people with no housing expense each month are going to have extra disposable cash to help them save their house. Besides, even if you can qualify for a refinance, the loan modification process is cheaper and more sensitive to the homeowner. As long as you do not want cash out, you should consider a loan mod before a traditional refinance.
What are "hardships" and do I qualify?
Here is an example list of hardships that lenders consider during the loan workout process:
- Adjustable Rate Mortgage Reset- Payment (uncommon, but we will see more lenders accept this in the future)
- Illness
- Loss of Job
- Reduced Income
- Failed Business
- Job Relocation
- Death of Spouse or C0-Borrower
- Death
- Incarceration
- Divorce
- Marital Separation
- Military Duty
- Reduced Income
- Medical Bills
- Damage to Property (natural disaster or unnatural)
We must show your lender that we have solved whatever temporary setback that you have suffered, and that the temporary setback has been or is about to be resolved. That once we make an arrangement with the lender and yourself; that you will stick to it and remain current!!!
They will typically give us 6 months as a temporary modification and we must make those 1st 6 payments on time…That means on the actual date that they are DUE!!! Not around that date but by that date or earlier!!! If we accomplish this, then they will permanently modify your mortgage for the balance of what everyone has agreed to 6 months earlier!!!
Although in a lot of cases you did not qualify with income when you obtained your loan, NOW that you have defaulted or are behind in your payments…The lender wants to know that you have sufficient income or cash flow that if we enter into an agreement to modify the mortgage that you now have the ability to pay whatever we all agreed to!!!
Who Qualifies for a Loan Modification?