Archive for the ‘Mortgage Modification’ Category

Loan Modification Appraisal

If you’re falling behind on your mortgage and cannot qualify for a refinance or an alternative payment plan, it is time you negotiate for a loan modification (mortgage modification). This is where you can work with the lender and get your loan terms and conditions modified so that you pay off the loan comfortably. The lender may either lower your mortgage rate thereby reducing your monthly payments or extend the loan term and make sure your dues are added to the loan balance.

The very first step in loan modification is to contact your lender or the current mortgage servicer to whom your lender has conveyed the servicing rights. But prior to contacting the lender or servicer, make yourself aware of the 3 things that decide whether you will qualify for loan modification. These are:

1. Your affordability: Lenders want to make sure that borrowers are not taking advantage of loan modification, that is, they are not applying for it even though they can still pay. This is why you need to prove that you simply cannot keep up with the payments. So, you need to explain your exact financial situation and provide data on your property value and how much you can afford to pay on your home. Here’s what you will need to have with you.

1. Monthly income and source

2. Paystubs

3. Monthly expenses in detail

4. Bank statements

5. Loan agreements

What you need to do here is, prove that you cannot afford the payments and it is certainly going to help your situation if you opt for a loan modification.

2. Your home equity: This is an important factor based on which the lender may or may not modify your loan. If you have enough equity in your home to pay off mortgage dues and foreclosure expenses, then the lender is likely to consider foreclosure as a low-cost solution.

However, there are some lenders who inflate your home appraised value when home prices are on a decline. But if you’re aware of property values or recent home sale trends in your area, you can get an idea of your home equity and thus avoid inflated appraisals.

3. Modification costs: Lenders prefer to minimize the costs when it comes to modifying one’s loan. However, mortgage modification is carried out by experts and lenders have no other option but to spend more when it comes to expanding their number. This is why some lenders do not respond quickly when they receive a loan modification request. So, here’s where you need to be active and negotiate in the best possible way.

With loan modification you can avoid a loan default as your payments become affordable. However, make sure you understand the modified terms and conditions in order to avoid further problems in your mortgage.

About the Author:

Jessica Bennet is an experienced financial writer associated with Mortgagefit Community. She has been guiding the Community through her writings and suggestions in our Community forums.

Article Source: ArticlesBase.com - 3 Things To Know Before You Go For Loan Modification

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Mortgage Modification Types

Question: Are you willing to pay higher interest and higher taxes to save your neighbors home?

Mortgage Modifications in Bankruptcy Would Undermine Homeownership, Would not Prevent Foreclosures

http://www.heritage.org/Research/LegalIssues/bg2242.cfm

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28% Say Allow Bankruptcy Judges to Change Mortgages
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Answer: Nope...

Loan Modification Success

Question: Has anyone had any success with a loan modification?

Initially we hired a company, total rip off, got 100 percent refund after threatening legal action. Our mortgage company doesn't seem to know what they're doing, we get assurances over the phone but also unsigned computer general threatening letters in the mail! Does this really work? Or are we destined to lose our home?

Answer: Karen, depending on your circumstances you probably need an attorney. Yes, most of the solicitations out there are a complete rip-off. Attorneys cost money but this is your house and your credit, not to mention a possible deficiency judgment.

The banks are getting a little better (and a little less indignant over the phone) because the underlying assets (the homes) are getting harder and harder for them to dispose of. That said, they have the upper hand. You're going thru one of these. They've gone thru, and are going thru, thousands.

Spend a few bucks on a real estate attorney that knows what they're doing. The bank's attitude and level of service will literally change overnight.

Hope this helps.