May 24, 2024


Mad about real estate

Two Words That May Make Your Loan Modification Successful – Persistency and Patience

Even though loan modifications are nothing new, their rise in popularity is due to the financial strain homeowner’s face in a struggling economy. The current ones are focused on reducing monthly payments on mortgages especially on adjustable rate mortgage which are due for an interest increase. One of the issues homeowners face when modifying is that the decision for modification is not made by the bank or company that owns the loan. The decision is usually made by a servicing company which the lender contracts. Loans are sold on the secondary market, and it’s possible that your mortgage is owned by several investors. This is one of the most difficult aspects of getting your modification approved. Despite that fact, the servicing agency per their contract is supposed to help you and find a solution to your problem. If a lower rate modification is chosen, all parties benefit and save additional costs. However, if you owe significantly more than the property is worth, there is really no benefit to you, unless you really want to stay in your home and plan to pay the full amount borrowed. In many cases, homeowners might just decide to have their property foreclosed. If foreclosure proceedings are filed, all court costs and attorney’s fees are paid by the lender. The decision as to which course of action to follow is one that lender’s examine very carefully. If they foreclose on too many properties they have to pay realtors to re-sell them, and maintenance companies for upkeep in the meantime. If they are too liberal and grant too many modifications, many people who really don’t need it, might apply just to get their payments lowered. This is one of the reasons modification can become a long process. Each case is examined on an individual basis and it is up to the homeowner to prove his hardship. A full financial affidavit must be provided showing income, debts, living expenses, etc., in order for the servicing company to make an accurate determination. Another problem is that many of the employee’s handling modifications are not really experienced enough not to mention that they are overwhelmed with cases. Persistency is key. If you speak to them and they tell you they’ll get back to you, chances are they wont. You need to call them repeatedly. Many times, paperwork is misplaced and they will ask you for the same things over and over. Keep a notebook. Write down who you spoke to (get full name), date, time, etc. When sending documents, make an extra copy for you and send them certified mail to insure delivery. You will remember that “Patience is a virtue” is certainly true when it comes to modification. Remember, persistence, patience and following up on your case, are key to success.