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.
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?
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.
Here is an example list of hardships that lenders consider during the loan workout process:
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.
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.
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.
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.
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.
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.
Yes! The lender will consider the total household income and not just the homeowner.