Myth Busting: Mortgage Modification Edition
Aside from handling bankruptcy filings, I have been zealously assisting clients with mortgage modifications since the housing market crash of 2008. I can tell with over 95% certainty whether or not you will qualify for a mortgage modification and what the terms of the loan modification will be. My clients have received amazing loan modifications including reductions in principal balances and incredibly low interest rates.
To ensure that you get a great mortgage modification the office uses the latest in detailed forensic analysis. It is a full-time job to know the loan modification underwriting guidelines and to keep up with what you are entitled to pursuant to national mortgage settlements. I am proud to be able to consistently get great mortgage modifications for clients. Recently, a client got over $200,000.00 in principal forgiven and now he is paying back the remainder of his loan with an interest rate around 2.5%.
I stand behind the work and the methodology. What I find is that there are myths preventing you from getting a great modification, or any modification at all. Let’s discuss some of them.
Myth: I’m sending what I can to show that I am trying to make the payments. This should show the mortgage company that I want to keep my home.
Reality: If you are not current on your mortgage, sending partial payments is a total waste of your money. Your mortgage company is not a thinking, feeling entity. If you are not current, your account is in some stage of pre-foreclosure. Short of getting the loan current with a lump sum payment, which I never recommend, a well-put together loan modification application is how you can show your mortgage company you want to keep your home.
Myth: I had a loss of a job, income reduction, illness, catastrophe. This should entitle me to a mortgage modification.
Reality: No one is entitled to a mortgage modification. Your hardship letter is merely a formality to the mortgage company. Remember, this is all numbers folks. If it looks like your mortgage is eligible for a modification after I review all the relevant data points, then great! If you have the income necessary to qualify for a mortgage modification program, then I look forward to seeing what the best result will be for you when I look at the feasibility for your mortgage modification.
Myth: This paperwork is easy. I can do it myself.
Reality: Yes. The packet of information is straightforward. Sure, you can supply pay statements, income, expenses, a hardship letter, and any other documentation requested by your mortgage company. However, the work behind the simple application form is where it counts. Based on the underwriting guidelines for an individual modification, household income may need to be at a certain level. Expenses may need to be only a certain percentage of income. Without knowing what should be on your application or what is needed on your application to qualify for the best modification possible, submitting an application on your own is a waste of your time.
My mortgage company says I can do this on my own. I don’t want to pay a lawyer to do a mortgage modification.
Reality: Your home is your biggest asset and largest debt. Your mortgage company is your largest debt collector. You certainly didn’t buy your home without a realtor or without an attorney or home inspections. Now, it’s time to make sure that you have our team behind you to get a great mortgage modification. Your mortgage company has their interest at mind, making the most off of your loan. They do not want you armed with knowledge and representation to ensure that you get the best results possible.
Myth: My friend got a 2% mortgage. I’m entitled to one too.
Reality: No! I wish that everyone was entitled to get loan modifications with interest rates under 3%. Every loan is different, and only after I look at all of the granular data behind your mortgage can I tell you what you may be eligible. Certainly, there are many clients who have gotten incredibly low interest rates on their modified loans. However, this was achieved with a lot of analysis and hard work by the office. Also, talk to a professional. That’s me! We do mortgage modifications all day long. We will honestly tell you what to expect from a mortgage modification.
Myth: My mortgage company is pressuring me to supply them with this information by a certain date. I need to hurry and get them an application.
Reality: Don’t let yourself be pressured by your bank. That’s why we take over. We handle all calls and correspondence with your mortgage company. Sending in a hastily put together modification packet on your own, without the hard data to know what to put on your mortgage modification application will at worst result in repeated modification denials and at best result in a modification. If you get a modification on your own, it may not have been the best terms that you were eligible for. Most people’s homes are there largest investment and largest debt. It is worth hiring a professional to work on getting you the best loan mod you are eligible for.
Myth: I was denied for a mortgage modification. I’m not going to qualify for one.
Reality: When we do a mortgage modification for a client, a denial letter from the mortgage company means that the mortgage company somehow made mistakes while reviewing your eligibility for a mortgage modification. Under HUD guildelines, we request detailed information as to how the mortgage company calculated a modification and denial. From there, we can submit a correct application and get you a mortgage modification.
Do contact me via phone or e-mail to discuss your loan during a free confidential consultation. Your loan may have already been modified, or you could have had several failed modification attempts. Regardless, there is help out there. I take pride in our personal service and nuanced knowledge of loan servicing and mortgages to help you stay in your home at a payment you can afford. I look forward to hearing from you. Do pass this on to a friend or family member if they can use help with their home mortgage.