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Loan Modification

I have a sonyma loan and my financial situation have changed. is getting harder to make the monthy payment. I have never been late and my credit is good. have not money in the bank but I have a 401k.  My question is: if I apply for a loan modification do the bank consider the $ that is in my 401k in their decision to grant me a modification? any advise on this or any other options that I should consider will be greatly appreciated. 

 Thanks VR
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April 30 - US
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Answers (3)

Profile picture for vianelas

Andrew Byrd, yes I have considered refinancing to 20 years, but the interest rate that If was offered is only 1 or 1 1/4 point below the interest rate I currently have. I guess it's because I don't' have that much equity.   plus I will be adding the closing cost to the loan.  That's why I was considering the modification.  So, if I am not late on my payments I won't qualify for the modification? My credit is very good and I don't want to mess it up by being late.  That's why I am looking for options before it's too late.

 

 

Sunnyview- I owe 20 years on my 30 year SONYMA loan. Bankruptcy is out of the question. I did take a loan from my 401k that I am still paying.  Thank you for the attorney suggestion I will look into .

 

Thank you Andrew/ Sunnyview for your suggestions.

Maybe I should apply for the modification and if I don't qualify then try refinancing to 30 years.   I don't really want to go that road, because I have 15 years to retire and I had hoped to have it paid off by the time I retire. or at the very least, nearly paid off.

ThanksJ

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May 01

First, if it is getting harder to make the payment but you are still continue to make it most banks will not allow you to do a modification until you are actually late on the payment. Have you considered looking into refinancing the property to lower the payment to a more feasable amount?

If you want more information about refinancing feel free to reach out to me through my zillow profile.

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April 30
Profile picture for sunnyview
The bank is not "supposed" to consider your 401K, but some do and some will tell you to withdraw money to give to them--a bad idea for most people. Even if you declare bankruptcy no creditor can force you to use or touch retirement funds to pay any debt unless they can prove fraud (ie a cash advance on a credit card that went directly to a 401K before you filed bankruptcy).

If you are starting to have trouble now, make an appointment with an attorney so you know the laws in your state and get all your options. Then call the bank and negotiate. It is better to be upfront with them and try to work out a plan than to wait too long until you start to go under.
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April 30
 
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