Posts Tagged ‘Mortgage modification’

How to Get Good Loan Modifications Without Getting Ripped off

Due to the rise in the prices of goods and services, a lot of people are tightening their belts in different ways—one of these ways is by applying for loan modifications for their existing ones. We admit that sometimes, we get carried away with purchasing the things we want and the things we desire without as much as thinking about them. Sometimes, we also save up for something, but unexpected circumstances get in the way, therefore redirecting our hard-earned money somewhere else. Thank goodness for these loan modifications that allow you to change some parts of your loan agreement with some banks. Given this, payments are made more affordable and you do not have to pay the default for your loan. Most banks choose to offer loan modification programs in order to make things easier for both parties.

When choosing from a number of loan modifications offered, you must be ensured that you don’t get ripped off, or end up paying more than what you bargained for; otherwise, the loan modification will absolutely make no sense, right? Here are some tips on how you can be sure to get the best loan modification program without getting ripped off. 

One of the recommended plans of action when choosing loan modifications is that you could choose to hire a loan modification specialist. I can help you sift and sort through various loan modification companies and refer you to a reputable one that is reliable and has had numerous clients who may prove this company’s authenticity. You may also call the companies referred to you by us and ask what you can expect from the company. 

It is also important to note that authentic loan modifications will usually give a written agreement stating the terms and policies of your modification. Do not completely trust various radio and television advertisements because they are often scams.

Written by Carol Pefley

www.carolpefley.com

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Mortgage mod test becomes clearer

Mortgage borrowers who are turned down for loan modifications may now get additional information that could help them understand why they didn’t qualify under the so-called “HAMP test.”

Read the full story

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What You Need to Know About Foreclosure

 

 

Summary – Foreclosure is the option available to lenders in case of payment defaults. They could assume ownership or sell a property to reclaim their amount. The homeowner can try for forbearance, loan modification or short sale to prevent foreclosing.

Foreclosure is the method by which lenders, who have been facing default payments for some time (two to three months) and are convinced that the borrower will not be able to pay back the loan, recover their capital. They either assume the property’s ownership or try to sell it off. Lenders typically file for foreclosure after they have contacted you both by means of a demand letter and over phone (typically a month after your payment date). They file for the papers with whichever authority is in charge. The foreclosing sale itself may happen three to four months after that.  

After the notice is recorded, an ad needs to be published for five to six weeks in a newspaper and a notice needs to be sent to the homeowner. Three to four weeks prior to the sale, the authority would also send a notice to the homeowner mentioning the sale and methods by which you can prevent the process. But, you do not have to wait till this particular notice arrives to do something about foreclosure. If you know that you will have to start defaulting or are already facing late payments you should start thinking about how to avoid losing the house to foreclosing.

Your best way to avoid foreclosure would be approaching the lender. You could ask the lender to offer forbearance or loan modification. Forbearance would mean that the lender allows you to go without paying for a few months in return for higher payments afterwards, till you catch up with the payment. It comes in handy if your lean period (when you cannot pay your mortgage) is going to last only for a few months and you could make higher payments without fail after that.

Loan modification involves modifying the terms of the loan such as loan term, mortgage payments, at times even capital. Since foreclosure is not a pleasurable experience for the lender either, it is very probable that you will get some modification (do not seek the help of people claiming to be lone modifiers unless they are registered and licensed. Do not make any upfront payments). You and your lender could also try and get a payment from the FHA Insurance Fund to make up for lost payments (Partial Claim). Do either only if you are able to meet the payments after that.

If you have equity on your home, you could also try selling it. If you do not have equity then this may not be an option. Do not list with a realtor if your property could get tied up. You also have the option of voluntarily giving back the property to the lender (Voluntarily Foreclosure) or getting somebody else to assume the loan in return for the property (only possible for loans made before 1988) or file for Chapter 13 bankruptcy (may be costly; you would have to make higher payments after that or you will lose your property again (Chapter 7 bankruptcy- It looks even worse on your credit report too). Finally, you also have the option of a short sale (only if the lenders agree to the reduced money that they will receive). The house is sold for an amount less than the loan amount and the proceeds are given to the lender.

Knowing these details about foreclosure will help you decide on how to proceed if you are facing payment defaults. Do not be an ostrich. Do something.

Written by Carol Pefley

www.carolpefley.com

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Getting Loan Modifications without Getting Cheated

Loan modifications are almost the last options for people who risk losing their home to foreclosures. In case you are wondering, it means modifying your loan so that you could manage to pay it back. It could be a change in the term, a reduction in the mortgage payments, at times even a reduction in the amount to be paid. The lenders agree to it because foreclosures are losing terms for them as well. At times, it is better for the lender to modify the loan than to go for foreclosures. Unfortunately though, there are many unsavory elements that take advantage of the desperation that a homeowner who risks foreclosure feels and try to rip them off by promising loan modification. You have to keep a wary eye out for such people.

Here are some tips that would help you get loan modification without getting cheated in the process –

  1. Call the Lender Yourself – It is not necessary that you should get an outsider to get your loan modifications done. You could try the direct approach. Many lenders have loan modification departments, so call them and ask them to guide you to the concerned department. If they say they don’t have them then ask them to guide you to loan mitigation department. And don’t be disheartened if they at first say no. Persist.

 

  1. Threaten Bankruptcy or Foreclosure – Since lenders dislike foreclosure very much you could threaten them with that to get them to agree to modifying your loan. Say the process will drag on for a long time if they do not agree to do something. And if you threaten bankruptcy it would be worse for them.
  2. Get Help from Licensed Folks – If you cannot get the loan modifications on your own get help from licensed people who specialize in it. Do not go for people without any license or reputation. Do not be taken in by ads.

 

  1. Do Not Pay Any Money Upfront – If any loan modification company asks for upfront fees then they are most certainly trying to cheat you. Hence do not pay any fees in advance.

 

  1. Ask for More Be Ready to Settle for Less – You should naturally ask for the most you could get by means of loan modifications. But this does not mean the lender will give you whatever you ask for. So be ready to settle for anything that you can manage and would improve your situation. Getting a professional appraisal done would also help your cause.

 

Loan modifications, if done properly can save your home and can save the lender all the bother of a foreclosure.

Written by Carol Pefley

www.carolpefley.com

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