This is the LoanSafe loan modification resource guide. This page is dedicated to help educate you about the loan modification process with free articles, videos, podcasts and links to free help.
If you need more comprehensive professional mortgage help along with example forms, hardship letters, income and expense sheets in a downloadable format, then I highly recommend that you purchase our special Loan Modification E-Book called “Saving the Dream” for only $99. The manual is written in a basic fashion and it explains in great detail how to process a loan modification from start to finish. We have went through a great effort to describe the numerous types of home loan resolution services as well. This e-book has been updated with all the latest information for 2014.(Coming Soon)
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What is a loan modification?
This is also referred to as a loan workout and it is when your current lender agrees to modify (change the terms) of your existing mortgage in order for you to afford the monthly payments and avoid foreclosure. When they modify your loan, this means you still have your original mortgage, but that your servicer either lowered your interest rate so you now can afford your monthly payments and or placed any late payments that you may owe on to the principal balance (the total amount owed on the loan).
In most all cases, your mortgage servicer will generally only lower the interest rate and possibly extend the term of your loan. Principle reductions rarely happen. So, if you’re just looking to knock your $500,000 mortgage down to $300,000 because that is all your home is worth, you need to understand that it’s probably never going to happen!
It is really as simple as that! The most difficult part of obtaining one is dealing with your uncooperative mortgage servicer and going through the long, crazy and drawn out process which may take from 6 months up to 2-3 years. Yes, I have seen some homeowners fight for meaningful mortgage help for 3 years and some are still fighting. You need to get educated and what you need to do most is prepare yourself mentally for one the biggest and longest fights of your life because your mental state as a huge factor on if you will be successful or not.
How do I know if I qualify?
A mortgage modification generally occurs when both parties (borrower and lender) to a problem loan mutually agree to workout the issues by creating new and better loan terms. The hope is that the new improved mortgage will enable to the borrower to meet their obligations and avoid foreclosure.
The determining factors that your lender will look at are:
- Nature of Hardship Causing Your Mortgage Problems
- Ability to pay
- Amount Owed
- Equity in the property
- Future financial situation
- What is better for them? To foreclose or pursue a loan workout with you and or modify your loan. Meaning which approach will best benefit the lender in the long run.
Bottom line, you have to have the ability to pay and some income coming in. If you don’t, then most likely your lender will suggest a short sale.
* Get free online mortgage assistance and search for your mortgage servicer in the LoanSafe Mortgage Advice & Loan Modification Forums
LINKS TO FREE GOVERNMENT HELP:
- Making Home Affordable
- Home Affordable Modification
- Home Affordable Refinancing
- HELP 24 hours a day / 7 days a week – (888) 995-HOPE
- Help For Homeowners Facing The Loss Of Their Home
- HUD Approved Housing Counseling Agencies: California Cities
- List of Approved Credit Counseling Agencies
Can’t get the help you need and deserve? FIGHT BACK!
- Write Your Senator Today! State Senator Contact Info
Department of Housing and Urban Development
- Mortgage Servicing Complaints
- Housing Counseling Agencies
- How to Avoid Foreclosure (82 KB PDF
- Tips for Avoiding Foreclosure
- Info on Escrow Accounts
Department of Justice (DOJ)
Federal Housing Administration(FHA)
Federal Trade Commission (FTC}
- File a Complaint with the FTC
- Credit & Loans
- Credit Repair: Self Help May Be Best
- Foreclosure Rescue Scams: Another Potential Stress for Homeowners
- Mortgage Payments Sending You Reeling? Here’s What to Do
- Mortgage Servicing Complaints and Info
Internal Revenue Service (IRS)
- Homeowners Who Lose Homes; Tax Relief Available to Many
- Q&A on Home Foreclosure and Debt Cancellation
Office of the Comptroller of the Currency (OCC)
More Links to Help:
- Get Mortgage Help Now – By County
- Loan Servicer “Hotline” Contact Numbers
- What if You Cannot Pay Your Mortgage?
- (VA) – Trouble Making Payments
- Mortgage Payments Sending you Reeling? Here’s What To Do
- NeighborWorks America
- National Association of Consumer Advocate Attorneys – NACA
- Neighborhood Assistance Corporation – NACA
- National Association of Bankruptcy Attorneys – NACBA
- Keys to Preserving Homeownership