Loan modification process steps

[MAXIE19]

Found this information online. Hope it helps those of us trying to do this on our own. The helpful steps have been emphasized.

Loan Mod Process Steps

1. We interview the client (homeowner) and mutually agree on expectations.
2. We collect the client's complete financial information and complete the debt to income (DTI) spreadsheet.

(complete financial information and all other necessary forms and perform NPV test)

3. We help the client fill out all of the necessary forms.
4. Client signs all the paperwork and gives us authorization to represent them.
5. We send the completed information package to the client's lender or lenders.

6. We contact the lender to have the modification case assigned and delegated to a loan rep. (squeaky wheel)

7. We send additional requested information to the loan rep. We only send what is asked for.
8. We review information with the loan rep.

9. We start the negotiation by requesting a specific amount of reduction and terms. (Here is where the NPV test is helpful in formulating your proposed affordable terms to lender. You can even enclose the results of your NPV test with your application packet to buttress your argument that it is more beneficial to modify than to foreclose).

10. We review clients financial state with lender. We discuss all options with lender and we demonstrate why it is in the best interests of the lender to re-negotiate this loan rather than foreclose.
11. We spend HOURS and HOURS emailing the lender, and playing phone tag and leaving voice mails.

12. If the loan rep is not responding, we take the case up to higher levels of management. (In other words, if denied, email the CEO and work through the Executive Office to hopefully get a much more favorable disposition).

13. The Lender outlines what they would like to see from the borrower
14. We outline the realistic payment needed.
15. The lender requests additional information that was not requested during the initial contact.

16. We provide the lender with an up to date re-sale value of the property. (Research recent and pending sales in your neighborhood and enclose with your application packet to show how far underwater you are. All of this information can be easily retrieved online, ex: longandfoster.com; trulia.com; yahoo real estate).

17. The Lender resubmits the information to their investor for a decision based on the information we have provided and their perception of the value of the property.

18. The Lender makes first offer.
19. We discuss the offer with our client (homeowner) and we make a counter offer.
20. The Lender makes a counter to our counter. This may go on for days.
21. Finally, all parties agree on the loan modification terms and conditions.
22. The Lender wants to talk to borrower to go over conditions.
23. We receive written conditions from the Lender
24. We review conditions to make sure it is the terms discussed. This is where a "Loan Mod Do It Yourselfer" gets hammered. They are not savvy to the hidden terms. (No problem, if you do not feel confident in your ability to understand the fine print, contact and consult with a lawyer to review the offer)

25. The deal is signed by borrower and returned to the lender.
26. The deal is done. The homeowner gets to keep his / her home and has the new lower monthly payments and possibly a smaller loan than what they had before.

[heidi79]

the only part about this that sounds iffy is the whole offer and counter offer for days, thing, I think everyone on this site knows how this process goes. the bank will make a decision and you have the choice of taking it or not, at best you can try 2 or 3 time to reapply with different scenarios and hope for the mod, otherwise, the clock is ticking and they will foreclose if they see you have no interest int their offers.

everything else sounds pretty on point.