Mortgage modifications or Loss Mitigation is when changes in the terms of a mortgage loan designed to make it more affordable to the borrower. There is Hope when it comes to Loan Modifications. Generally, modifications are available only to borrowers in default, or in imminent danger of default from impending rate increases that will make the mortgage payment not affordable to them. The purpose is to cure or avoid the default, thereby avoiding foreclosure.
Homeowners in a hardship or approaching a hardship, should request a modification. You are very unlikely to get one if you don’t ask. And it can be stress-full to accomplish on your own. I say its allot like taking your car to a transmission shop. sure you know how a transmission works, but would you work on it alone? Click here to be helped with your loan modification request.
Loss Mitigation
When the homeowner and the mortgage company are working together to determine the appropriate option/workout solution to bring the mortgage current and avoid foreclosure.
Modification
Any change to the terms of a mortgage loan, including changes to the interest rate, loan balance or loan term.
Learn more about Modifications here.
Mortgage
A legal document that pledges property to the mortgage company as security for the repayment of the loan. The term is also used to refer to the loan itself.
Mortgage companies may originate (i.e., your lender) as well as service the loan. The lender who originated your mortgage may or may not service your loan. When the mortgage company services your mortgage, they do the following: collect the homeowner’s mortgage payments, pay taxes and insurance, generally manage your escrow accounts (i.e., they “service” your loan), and provide customer service and support.
In Our experience the Proof of Hardship and supporting documents need to come from you!
The Burden of Proof Is On the Borrower
Click here to be helped with your loan modification request.
Banks fear that if they are liberal in granting modifications, borrowers who don’t need a modification will seek one anyway. And try and take advantage of low rates as well as reduced payments, while homeowners in real hardship’s may not get the assistance they actualy need to make there home affordable long term. They protect themselves against this by entertaining modification proposals on a case-by-case basis, while placing the burden of proof on the borrower.
Borrowers must accept the burden of proof. In addition to the data on property value, they need to document that they cannot afford the payment increase that is pending, and they must document exactly what they can afford.
For this purpose, borrowers should calculate their total debt ratio: the sum of mortgage payment, other debt payments, property taxes, and homeowners insurance as a percent of their gross (before tax) income. This number should be calculated now, what it will be after the rate adjustment, and what they will be able to afford. Estimates say a servicer may be willing to accept 45% as a reasonable maximum. That is pretty high, FDIC in modifying loans held by banks it has taken over, uses 38%. We have seen 28-31 % as well so contact us to find out if you qualify.
Click here to be helped with your loan modification request.
Buy using a HUD approved housing counseling agency or counselor you will be able to get the assistance and experience needed to help you over come your hardship and get back on track to making your home affordable. There is HOPE when it comes to loan modifications. There will be some work involved including gathering supporting documents and some time to gather your information so they counselors can speak to your bank or Lender on your behalf.
So if your looking for some assistance with your current mortgage or just have questions, contact us now. This service is always free of charge, and you could have a counselor talking to your bank in less than 5 days. We wish you the best of luck, and remember we know from experience that people who put in the work are the ones who typically get modified.
Click here to be helped with your loan modification request.