Frequently Asked Foreclosure Prevention QuestionsWhat exactly is a loan modification? A loan modification is a permanent change in one or more terms of a home loan. The modification process allows the loan to be reinstated, and can include an interest rate reduction, a longer loan term, principal reduction, forgiveness of delinquent payments or a combination of all four. Bottom line, a successful loan modification should lower your monthly payment and ease your financial problems. Will I have to pay all of the late fees and penalties? Not in the majority of the cases. We are seeing that most lenders will either waive the late fees or allow you to include any outstanding amounts into the new loan. Will my bank need to do a physical inspection of my home? Not in the majority of the cases. In fact, we have yet to run across a situation where the lender has needed to do another inspection. How can I find out if I qualify for any one of the available programs? We are seeing that the #1 criterion lenders look for to approve loan modifications is proof of your ability to afford the new loan payment now and in the future. Contact your lender to find out what they can do for you. How can I find out if my loan is guaranteed by Fannie Mae or Freddie Mac? Please navigate to the two links below; Can I still qualify for a loan modification program even if I am not currently delinquent? Yes. Most lenders will accept applications from homeowners who foresee a problem meeting their home loan payments due to interest rate resets or financial hardship. The Federal government is urging lenders to proactively reach out to homeowners who face potential default. Our process allows you to apply for a loan modification without currently being delinquent. What is an acceptable hardship situation? While each homeowner's situation is unique, we are seeing that lenders generally consider the following as acceptable reasons to consider a loan modification; Does a loan modification program stop a foreclosure? Yes. Once a mortgage modification is completed the loan is immediately brought current. What about my missed payments - can they be added back into my loan? Yes, in our experience missed payments can be added to the new loan balance and then spread out over the term so you can then afford the new loan payment. We have seen that some lenders may require a "good faith" payment to start the modification process. How do Banks and other Lenders perceive Loan Modification? Would they rather foreclose? We have experienced that Banks DO NOT prefer foreclosure to a reasonable, workable loan modification. Contrary to public opinion, banks are not looking to scoop up all the homes they can find. They have more real estate in their portfolios than they can handle. The average foreclosure costs the mortgage lender $50,000 and the number of foreclosures is growing at an alarming rate. It is almost always in the lender's best interest to participate in any one of the available modification programs. How long does it take to complete a loan modification case once we have submitted all of our paperwork? The process takes anywhere from 2 weeks to several months. This depends on the stage of foreclosure you are in and your financial position. Typically it takes about a month to complete a work out agreement and stop foreclosure proceedings. Do I have enough time to stop my foreclosure? You still have hope until the foreclosure sale occurs. If a sale date for your house has been set you need to act fast. Your best option is to take action immediately before it's too late. What can I expect from a successful loan modification? 1. Lowered monthly payments |