How to Obtain a Mortgage Modification Loan [mortgagegoal.blogspot.com]
New rules and practices for 2011 make it advantageous to do-it-yourself loan modification or short sale. Please see Part 1 and Part 2
mortgagegoal.blogspot.com How to Get a Mortgage Modification or Short Sale in 2011 - Pt. I.wmv
A mortgage modification loan is a growing need for thousands of homeowners pinched between a bad economy and a mortgage made in a different economic environment. Since the recent economic meltdown thousands of people have successfully negotiated modifications with banks and other lenders. The process can be intimidating for many, but with a little knowledge and forethought, mortgage modification is possible. Requirements differ from bank to bank, but there are some general assumptions which can be safely made by homeowners navigating the process:
First, mortgage modification will only be allowed on a homeowner's primary residence. Mortgage modification was designed to help homeowners survive an economic crisis without losing their homes. Banks will not consider modifying a mortgage on rental properties or vacation homes. In fact, owning a second dwelling will make it unlikely that a modification would be considered on your primary residence.
Be upfront and honest about your situation.
Many people seeking loans and modifications are desperate. They fear the consequences of losing their homes. They may be embarrassed about their financial situation. Many times applicants for loan modifications attempt to hide income or otherwise mislead the loan officer. The process for obtaining a modification is there to help you, however, and a lack of truthfulness will defeat that purpose. Different banks require different levels of verification. You have no way of predicting to what depth the bank will delve to check the information you provide.Be aware of the cost of your modification. The new payment level will be set at 30% of your income. This is standard and should represent a significant reduction compared to your previous mortgage payment amount.
However, be wary of service fees, origination fees, and the like. Banks participating in mortgage modification programs are receiving fees from the government and should not be attempting to soak the mortgage holder as well.Before signing an offered modification plan, shop around. There are numerous financial institutions and accepting the first offer is almost always a bad move. In this process it is important for you to remember that you are merely a consumer of a financial product and not someone being punished. The bank is not doing you a favor - they are making a business decision from which they will profit. Always look around for a better deal.
These are just a few things to think about before approaching banks about a mortgage modification loan. Remember; enter into this transaction with a lot of thought and planning. Fear of losing your home can lead to emotional responses that may prevent you from good decision-making. Mortgage modification is an important, but routine, agreement. And lastly, have a neutral party review any agreement before you sign your name.
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