It is no secret about the rising amount of mortgages that need modifications.
Here are the steps to see if you can do a mortgage modification on your home.
First you have to ask your self:
1. Do you owe more then your home or mortgage then it is worth?
2. Have you had a financial hardship (ie a loss of income).
There are a lot of companies that will do a mortgage modification for a fee.
My 2 cents before you go down that path is to call your lender and see what you can do on your own.
The important thing to remember is to keep a cool head. Then be persistent. If you don’t like what your lender tells you, call back the next day and ask again and you have to be organized, take lots of notes.
Here are the basic steps:
1. Call your lender and ask for the Loss Mitigation Department.
You want to ask for a mortgage modification package or a loan modification package.
Have a fax number ready to give them as they will fax the package to you.
Say Thank You and the package should come by fax with in 24 hours.
2. There is a lot of paper work involved with a mortgage modification. Again be organized!
Think of everything you went through to buy your home…. well, now you are gonna do that in reverse.
Your lender will give you a list of documents they will want from you in order to consider a mortgage modification for you. Get your pay stubs, bank statements, tax returns, W2’s together, along with a hardship letter. It is best to hand write your hardship letter (MAKE IT LEGIBLE) you need to tell the bank why they should give you a discount. Tell the truth but give them all the details, if it is medical or if you have had your hours cut at work or have flat out been laid off.
3. With doing a mortgage modification your lender will have certain time frames you need to get things back to them. GET IT BACK TO THEM! Otherwise they will scrape your mortgage modification and you will have to start all over.
4. Fax everything back to your lender 1 time, in one complete package! wait 24 hours call in to make sure it has been received and then follow up ever 24-48 hours to see how things are going after about 2 weeks start asking if it has been assigned to a negotiator or asset manager. It is best that when you call in you all ready have done your math. Take 35% of your monthly income and figure out what your interest rate needs to be to make that work with your current loan balance… Ask for that interest rate.
For every $1,000 of income – That equals $350 of house payment.
For every $100,000 of mortgage – Every percent equals about $84 on a monthly payment.
If you are making $1,000 a month and you owe $100,000 on your home at 7% your monthly payment would be about $584 a month.
If your lender could keep you in your home by lowering your interest rate to 4% your payment would drop down to about $334 a month.
I have seen 6 and 7% mortgage’s get cut down to 2% and I have people get rejected all together.
Here is the deal. It cost the banks a lot of money to foreclose on a property and at the end of the day they do not want to take your home back. If they can cut a deal that makes “cents” for them they will do it.
Your lender wants to know if they give you a discount, will you be able to make your payments? Your lender will look at your total current income and see if they can adjust your current interest rate to make your monthly payment equal to about 35% of your monthly income. Depending on the scenario they may only offer a 12 month mortgage modification or they might do longer, it is handled case by case.
The Federal Government has come out with the HAFA program, however it is voluntary for lenders to participate in it. You can read more at: http://www.homessanmarcos.com/san-marcos-making-homes-affordabl
HAFA spells out a lot of the criteria that lenders look for when considering a mortgage modification on your home.
Lenders are under no obligation to give you a Mortgage Modification.
But it does not hurt to ask!
Cheers,
www.HomesSanMarcos.com
This information is deemed reliable but is not guaranteed, individual results will vary.
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James Baxter
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