Integrity First Financial

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Loan Modification FAQs

1) What is Loan Modification?

This term is used when your lender modifies or changes the terms of your current mortgage. Your note terms can be modified several ways. The lender can modify your rate, fix your payment, stretch your payments over a longer period, reduce principle balance or even delinquencies owed.

  • A Loan Modification will change the existing mortgage note and give you a fresh new start in managing your home. Your account will be brought up to date immediately.
  • A change in rates and payments do not result in the need for a new closing, legal fees, survey, appraisal, or taxes. In contrast, if you "refinance" a loan you'll be required to have a closing and forced to pay a variety of fees and taxes.
  • Lenders are willing to negotiate when borrowers are facing financial difficulties and can't obtain other financing alternatives. Integrity First Financial Services, LLC shows the lender why it would be in the lender's best interest to agree to a workout arrangement. In turn, a modification of terms to you original note makes your loan affordable to ultimately avoid foreclosure
  • Integrity First Financial Services, LLC works with you and your lender to mutually agree to a workout agreement creating new and better loan terms which are affordable and realistic. Our detailed personalized financial analysis makes this hope become a reality.

2) Can't I do this myself? Why should I pay someone else to do it for me?

Of course you can negotiate with your mortgage company yourself. However, you may find dealing with your mortgage company to be a dehumanizing experience. You are shuffled along an assembly line-like process, never sure if the representative you are talking to is truly looking out for your best interests or merely trying to protect the lenders interests and make their quotas.

When you are on the phone with your mortgage company and they tell you there is nothing that can be done for you, do you really know if this is the truth or if it is simply what the representative chooses to tell you as a result of their inexperience or apathy. The mortgage company representatives you will deal with work in call centers- a low-paying, high-turnover field of employment. Our negotiators have more experience in mortgage retention than most of these representatives, do you?

3) Does my mortgage company want to foreclose on my property?

Absolutely not. When a mortgage company forecloses on a property, they almost invariably lose money. A foreclosed property that becomes an REO (Real Estate Owned) is a liability and NOT an asset. While it may be encouraging to know that your lender’s financial interests lie in keeping you out of foreclosure, you should also realize that mortgage companies are some of the largest owners of real estate in the world. They do not want more REO properties in their pipelines.

4) What are "hardships" and do I qualify?

Here is an example list of hardships that lenders consider during the loan workout process:

  • Adjustable Rate Mortgage Reset - Payment Stock (uncommon, but we will see more lenders accept this in the future)
  • Illness
  • Loss of Job
  • Reduced Income
  • Failed Business
  • Job Relocation
  • Death of Borrower, Spouse or Co-Borrower
  • Incarceration
  • Divorce
  • Marital Separation
  • Military Duty
  • Reduced Income
  • Medical Bills
  • Damage to Property (natural disaster or unnatural)

5) What other options do I have?

Besides a loan modification you have several other options to consider. Lenders may offer a forbearance plan, repayment plan, Deed in lieu of foreclosure or short sale. A Short-Sale and a Deed in lieu of foreclosure require you be in default.

Short sale:
A short-sale occurs when a property is sold below the balance owed. Our negotiators work closely with your lender to get a short-payoff as paid in full. Example: If the unpaid balance of a loan is, say, $100,000 and a property sells for $90,000, under a short sale the lender might accept $90,000 as payment in full.

Deed in lieu:
A Deed in Lieu of foreclosure is a disposition option in which a mortgagor voluntarily deeds his/her property in exchange for a release from all obligations under the mortgage. Some lenders may even give you cash to deed your home back to them. This is also known as "Cash For Keys".

Besides loan modifications, our legal team has many years experience negotiating short sales and deed in lieu of foreclosure.

6) How long will it take for me to renegotiate my home mortgage and my second mortgage loan?

In most cases it takes 60 to 90 days. However, 120 days is common with lenders who are backed up. The trend lately has been lenders taking longer and more likely to be 4+ months. It is important to remember that each loan modification is unique and the time varies based on who your mortgage lender is and what your hardship details consist of.

7) Can my lender perform an interior inspection before loan modification?

Yes, your lender may conduct any review it deems necessary to verify that the property has no physical conditions which adversely impact your continued ability to support the modified mortgage payment.

8) Can my lender capitalize an escrow advance for Homeowner's Association fees?

Yes, your lender must also escrow funds for those items which, if not paid, would create liens on the property positioned ahead of the FHA-insured mortgage.

9) Is my lender required to perform an escrow analysis when completing a Loan Modification?

Yes, your lender will perform a retroactive escrow analysis at the time of Loan Modification to ensure that the delinquent payments being capitalized reflect the actual escrow requirements required for those months capitalized.

10) Will income of people who are living in my home but not on the mortgage or title be considered for Loan Modification?

Yes! The lender will consider the total household income and not just the homeowner.

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60 Lincoln Highway, Edison, NJ 08820
Tel: 732-662-9780 | Toll Free: 866-963-6443 | Fax: 732-662-9781

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