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Mortgage Loan Modification to help you avoid foreclosure

If you're unable to afford a refinance or an alternative repayment plan in order to pay off your mortgage dues and avoid foreclosure, you may go for Loan Modification. Mortgage Modification involves extending the loan period and adding the missed payments to the loan balance. This may reduce your monthly payment and help you pay off the dues in order to get current on the loan. The monthly payments can also be lowered by rate reduction. Are you eligible for loan modification? You may be eligible if: The lender hasn't declared a foreclosure yet and even if he has done so, he should have removed the loan from the foreclosure status. You're delinquent on the loan for 3 months or more. The loan has been originated for more than 12 months. You should have stable surplus income to help you pay at the modified rate/terms. The property should be in good physical condition How will you get approved for mortgage modification? Check out the 5 tips to help you get approved for modification. Prepare a Financial statement including a detailed list of your expenses (food, gas, credit cards and other financial obligations) in a spreadsheet and calculate the average costs on each item for the past 3 months or so. This is important because most lenders would ask you questions on your financial situation and ask you for a Financial Statement. Prepare a Hardship letter of not more than 2 pages wherein you'll put down why you aren't able to carry on with the usual payments and why need a loan modification. Know how to write Hardship letter. You need to make sure that you have 1-2 hours at hand every day from your daily routine so that you can meet the the representatives at the lender's Loss Mitigation Department and discuss on your loan modification. Gather your paystubs and bank statements for past 2 months as the lender would like to check them along with your Hardship letter and Financial Statement. The lender may take 15-30 days or even 60 days to review your loan status and Financial Statement depending upon how much you're behind on payments and whether your loan is very close to foreclosure. If you're denied for mortgage modification, don't lose hope. Contact a loss mitigation specialist who'll be able to negotiate on your behalf for getting the modification approved. What happens when your loan is modified? You'll be able to get current on the loan. If you have an ARM, modification may help you convert it into a fixed rate fully amortizing loan. The lender may reduce the interest rate below the market rate. The entire PITI (principal, interest, escrow items such as tax and insurance payments etc) may or may not be added to the current loan balance. Any administrative fees resulting from cancellation of foreclosure may be added to the loan balance. The modified principal balance can exceed 100% loan-to-value or the original principal balance. Loan modification may be offered alone or as a part of forbearance . However, if you're delinquent even after modification, the lender will consider it as a new default and service the loan accordingly.

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spyne Joined: 13 Nov 2007 Posts: 3 3.09 Dollars($)	Posted: Tue Nov 13, 2007 4:08 am    Post subject: Mortgage Loan Modification to help you avoid foreclosure I was out of work for 3 months back in the late spring and early summer. After I obtained a new job I spoke with my lender and they wanted me to pay a three month "good faith" payment which was only a little above my current payment. I paid those 3 "good faith" payments and now I received a loan modification letter. The letter sets my loan back to 360 months and totally offsets the 2 years I have been paying on the loan. I owed 78,000 on my home and now according to this i will now owe 84,000. THis also increased my monthly payment by over $105 a month. THere is no way I can afford this. I thought a mortgage modification is supposed to help not hurt?? Any ideas on what I should do, I am very confused and lost. THanks in advance.
Michel Guest 0.10 Dollars($)	Posted: Tue Nov 13, 2007 5:20 am    Post subject: Hi, I think you should contact your lender immediately and ask for the details of how the mortgage has been calculated. Did the lender provide you with a written document that you will be regular once you pay the 3 good faith payments?
spyne Joined: 13 Nov 2007 Posts: 3 3.09 Dollars($)	Posted: Tue Nov 13, 2007 5:33 am    Post subject: I already paid the 3 good faith payments. THey sent me the full mortgage modification document that I am supposed to sign and send back in with in 5 days. I did call them when I received the information and the first girl I talked with was not answering my questions so I asked to speak with supervisor. I was very calm and collected and from the onset of this call with the supervisor he was VERY argumentative to me to the point where I said he was starting to get me angry due to his tone. They never contacted me after I made the last good faith payment and just sent me this document. It puts me back at 360 months and added almost 6,000 dollars to my principal and raised my monthly payment at the same time. I'm just not sure what is going on because I was not able to get ANY information or questions answered when I called.
spyne Joined: 13 Nov 2007 Posts: 3 3.09 Dollars($)	Posted: Tue Nov 13, 2007 5:40 am    Post subject: Well that is the problem with the current modification. It is going to be extremely difficult to afford the upward payment now. THe only info I can tell from the document is that I am $1400 past due. I just can not seem to figure out where the other 4600 came from. The guy on the phone told me it was due to costs for basically re-doing the loan. Feels like I am paying for closing costs again......
larry Joined: 27 Jun 2007 Posts: 3328 473.51 Dollars($)	Posted: Tue Nov 13, 2007 5:41 am    Post subject: Hi, Before taking a decision you need to consider what is the best option for you and what you can afford. If you find that mortgage modification is hurting you rather than helping you, why would you go for it? Now how mortgage modification may help you? The best thing is that you can avoid the foreclosure. Thus you can save your credit score falling down drastically. If you go through the foreclosure proceeding, your credit will drop 200 to 300 points and it will be shown on you credit report for the 7 to 10 years. Above all, you might not be able to get any loan in coming 2 or 3 years. Thanks, Larry
JohnJ Guest 0.10 Dollars($)	Posted: Tue Nov 13, 2007 5:35 pm    Post subject: Modifications You could also be paying for attorney fees. If you were three months behind, you may have been in foreclosure, which will add a signficant amount of cost to your loan. This would also be indicated on your credit report. Which could limit your other options. Good luck.
ran1234 Guest 0.10 Dollars($)	Posted: Tue Aug 19, 2008 11:41 am    Post subject: modification for no paystubs Does lender requires filed 1040 tax forms as part of modification? Thanks, Ron
sara Joined: 05 Jul 2006 Posts: 1206 Location: New Brunswick, New Jersey 223.95 Dollars($)	Posted: Wed Aug 20, 2008 5:17 am    Post subject: RE: form 1040 for loan modification Hi ran, Lenders may check form 1040 when you request for loan modification. But aren't you able to show your paystubs for the past 2 months?
momo Guest 0.10 Dollars($)	Posted: Tue Aug 26, 2008 10:34 am    Post subject: Compensation How a Real Estate broker or a mortgage company get paid if they performe ( help ) a modification on behalf of a borrower?
baljit Guest 0.10 Dollars($)	Posted: Wed Aug 27, 2008 12:51 am    Post subject: my broker is currently helping me with my loan modfication, will they get paid by doing so?
jameshogg Joined: 20 Dec 2005 Posts: 1521 Location: nevada 212.43 Dollars($)	Posted: Wed Aug 27, 2008 1:03 am    Post subject: RE: lender/broker get paid for loan modification Hi Momo and baljit, Welcome to forums. It's the loss mitigation department of a mortgage company or broker (who's also a lender) company that works with the borrower for a loan modification program. And the company gets the money it has invested on the borrower's property provided the latter is able to follow the modification plan in a proper way. By the way, do you wish to know if you need to pay the broker for loan modification? well, this depends on the lender/broker you're dealing with. Thanks
HELP Guest 0.10 Dollars($)	Posted: Wed Sep 24, 2008 7:26 pm    Post subject: LOAN MODIFIED WHAT IF YOU DON'T HAVE THE MONEY THEY ASK FOR UPFRONT ONCE THE LOAN HAS BEEN MODIFIED
Guest 0.10 Dollars($)	Posted: Wed Sep 24, 2008 7:33 pm    Post subject: WHAT IF AFTER i GET THE MODIFIED PAPER WORK i CAN'T PAY THE UP FRONT PAYMENT
smithsussane Joined: 18 Sep 2008 Posts: 959 Location: Alaska 88.31 Dollars($)	Posted: Wed Sep 24, 2008 10:39 pm    Post subject: Hi Guest! Welcome to the forums! You will have to immediately contact the lender and consult with him. If you are unable to pay then it can be taken as a default and the lender can foreclose your house. Feel free to ask if you have further queries. Sussane
eulyth Guest 0.10 Dollars($)	Posted: Thu Sep 25, 2008 3:15 pm    Post subject: wells fargo I sent the papers back unacceptable on the modification. It did not help lower my payment. I owe 210,000 on an 87,000home. I do not care what they do I will not pay that money! Wells fargo told me when I bought the home it was worth 250,000 so I gave 25,000 down and now they say sorry!!! My credit score was 800 until this is happening. My income is 50% lower than when I purchased the home. I followed all the steps hardship letter, profit & loss sent to loss mitigation and was assigned a negotiator who called and said we have an agreement for you. I want 4.5 interest for 40 years I got a reduction of 60.00 a month if I send 5800 dollars. How does this modification work. plus my mtg is not owned by wells fargo. Please explain what you can to me. Thanks

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