Hope Now Reports 34,000 Loan Modifications in November 2015

The alliance between HUD approved counseling agents, servicers, investors and other mortgage market participants known as HOPE NOW, reported yesterday that an estimated 39,000 homeowners received loan modifications, and 28,000 foreclosure sales were recorded during... read more

Mortgage Delinquencies Spike in November 2014

Black Knight Financial Services, the nationwide mortgages services, data and analytics firm for lenders and servicers, released its November Mortgage Monitor Report showing nearly a 12% spike in the home loan delinquency rate which was the largest leap in... read more

To Seek or Not to Seek Loan Modification Again

(Loansafe.org) – Here is an interesting loan modification scenario and how it pertains to the new and improved Making Home Affordable, Home Affordable Modification Program; commonly referred to as MHA HAMP. This program can benefit the borrower who is already in... read more

What is a loan modification?

A loan modification is a change to the loan contract which is agreed upon by the lender and the homeowner. The lender modifies the existing loan(s) in order to work with the homeowner because of a financial hardship. The purpose is to help make the loan(s) more affordable. You can obtain a modification from your lender for financial hardships, loss of income, unaffordable rate adjustments on adjustable-rate and subprime mortgage products etc. The earlier the you address the issue, the better the chances are of negotiating a fixed-rate and a payment that is manageable.

This has become the number one solution for a homeowner to get back on track and prevent an inevitable foreclosure. Loan modifications when done by yourself or with the help of a non-profit housing counselor do not require any upfront funds.

Generally, loan modifications are in the form of an interest rate reduction, changing the term from an adjustable to a fixed-rate mortgage, capitalizing the arrears (adding the past due amount to the loan), extending the term of the loan or principal forbearance. Don’t expect a modification just because you owe more on your mortgage than the home is currently worth, this is not considered a hardship and servicers are not required to offer principal forgiveness. Thus, if you’re underwater by tens of thousands of dollars, a loan modification is likely not going to provide relief in that department. In the past, loan modifications were only utilized when a borrower was delinquent and suffered a hardship such as a job loss, divorce, or illness.

A key factor that is required in every loan modification submission is the existence of a hardship. The hardship can be temporary in nature or permanent, but the borrower must be able to prove the hardship. The following are a sample of hardships that get loan modifications approved:

1. Adjustable Rate Mortgage – Reset-Payment Shock
2. Illness of the Borrower
3. Illness of a Borrower’s Family Member
4. Curtailment of Income
5. Loss of Job
6. Property Problems
7. Inability to Sell the Property
8.Mortgage Servicing Problems
9.Reduced Income
10.Failed Business
11.Job Relocation
12.Death of the Borrower
13.Death of Spouse or Co-Borrower
14.Death in the Family
17.Marital Separation
18.Military Duty
19.Medical Bills
20.Damage to Property (natural disaster or unnatural)

This process can easily take anywhere from three to twelve months or more to complete, and in some cases up to a two years. Even if you feel like you’re a perfect candidate for a loan modification, you will most likelye have to jump through several hoops before you reach success. Just try to always be very polite – but firm – each and every time you communicate with your servicer. Keep track of dates/times and the name of any representative you speak with, this may come in handy later if you get conflicting information from a separate department.

The key when applying for a loan modification is to have patience and be persistent. This process may take a long time and be stressful. Try to control this stress and understand that what you cannot control is not good to stress over. This is just business to these big banks, and mortgage servicers. If you remember this and do the same yourself, it will help you deal with the stress and sometimes the comedy of it all.

Do the best you can, stay positive as possible and hope for the best. By doing this you will take care of business, and also have a life with your loved ones.

I have seen thousands of people just like you over the last seven years obtain a loan modification. Sometimes at impossible odds. If they can do it, so can you!


Learning how a loan modification works

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Will a loan modification stop foreclosure?

Homeowner Rights While in Foreclosure

Can I get a loan modification if my mortgage is not behind?

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How To Write a Hardship Letter For a Mortgage Modification

Sample Loan Modification Hardship Letter

Does a loan modification affect your credit score?

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Can I Do Modification on My Jumbo Loan?

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