A mortgage loan modification is an agreement between the lender and homeowner that allows the mortgage terms to be modified. The idea is that this will help you to be able to make your payments and keep your home in order to avoid foreclosure.
The most important thing to remember when you are working with a loss mitigation specialist to try to modify your mortgage is that he is not on your side. Don’t go telling him you have some extra money coming in, for example. It will be noted in your file and when it comes time to draw up a plan they will want to see that money accounted for.
The next thing you need to do is get all of your financial information together. You will need to be able to prove your income and expenses. That means you have to have all of your recent pay stubs and bills, and maybe some that are not so recent. You will also need tax records for the past two to three years. Be prepared to prove any unusual expenses that contributed to you falling behind on your mortgage.
When you are working with a lender to get a modification, you must keep records of everything that is said, as well as any correspondence sent or received. Some banks are notorious for saying they didn’t receive something when they did or trying to change the terms that were agreed to. Get a recording device for your phone and use it. Keep anything you get from the lender in the mail and keep copies of anything you send to the lender.
Save up the money you would normally be paying toward your mortgage payments, even if you don’t have enough to pay the full amount. When you are finally able to reach an agreement, the lender may require a lump sum amount to start the loan modification. You could be out of luck if you no longer have the money available.
Most important of all, don’t make an agreement that doesn’t work for you. The bank will often make you an offer that actually increases your payment amount for a period of time to get you current, and then goes back to the normal payment amount. Unless you have gotten a raise since you started having trouble making ends meet, this is obviously not going to work. Keep at it until you get something that will work for you, and be prepared to walk away if no agreement can be made. Foreclosure is not the end of the world, and you may even find yourself better off if you can get yourself into a cheaper home with management rent or payments.
As many as 6 million families are expected to face foreclosure in the next several years. The Law Offices of Janian and Associates is a Real Estate Litigation law firm. Janian Protects Homeowners
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