What is a Loan Modification and Who Qualifies for One?
By: Diane Tuman, Zillow Content Manager | February 20, 2009
Yesterday, Zillow VP of Communications Amy Bohutinsky wrote a post about step one in President Obama’s housing plan, which is to get responsible, qualified homeowners to refinance to a lower rate. Today, this post will deal with step two of Obama’s plan: loan modifications.
What is a loan modification?
Whether you call it a loan modification, mortgage modification, restructuring, or workout plan, it’s when a borrower — who is facing great financial hardship and is having difficulty making their mortgage payments — works with their lender to change the terms of their mortgage loan. The workout plan could result in temporary or permanent changes to the mortgage rate, term and monthly payment of the loan. The plan’s goal is to help the borrower reduce their monthly mortgage payments to 31% of their gross income. Under Obama’s plan, loan modifications will be standardized, with uniform loan modification guidelines used by Fannie and Freddie Mac, and then they will be implemented throughout the entire mortgage industry.
Who is eligible for a loan modification?
According to the Department of Treasury: “Anyone with high combined mortgage debt compared to income or who is “underwater” (with a combined mortgage balance higher than the current market value of his house) may be eligible for a loan modification. This initiative will also include borrowers who show other indications of being at risk of default. Eligibility for the program will sunset at the end of three years.”
As reported in the LA Times, “This program applies to borrowers who are unable to make — or are struggling to make — mortgage payments that exceed 38% of their monthly income. If the lender agrees to lower the interest rate or reduce the principal amount to bring the payment to 38% of the borrower’s income, the government will pay half of the additional cost to the lender to reduce the payment to 31% of the borrower’s income.”
Who’s not eligible for a loan modification? Speculators — or those who bought homes for investment purposes. All homes must be owner/occupied. Also, mortgages with amounts above the conforming loan limits would not be eligible.
How does someone get a loan modification?
The details of the plan will not be released until March 4, but, in the meantime, call your lender — the company where you got your loan — and ask for the loss mitigation department. Honestly state your situation. They will assess it via phone calls and paperwork and determine whether you qualify for a modification and might tell you to wait until March 4, when details are revealed. Keep copious, detailed notes on who you speak with and details of the conversations so you have documentation down the road if you are faced with foreclosure.
Also depending on the direness of your financial difficulties, it’s always good to hire legal counsel. Get a referral from your local state bar association. Or, call a local HUD-Approved Housing Counseling Agency for guidance.
One word of warning: This new bill has spawned a whole new wave of loan modification salespeople who might be perfectly fine and those who are not. Be careful. You can find loan modification reps through Zillow Professional Directory, but you must do your due diligence to make sure these people are legit, as well.
Why would lenders modify your loan?
Incentives. According to USA Today, the plan also includes incentives to encourage mortgage servicers — who collect fees for refinanced and delinquent mortgages — to work with qualified borrowers to modify loans. Servicers will get $1,000 for each eligible modification they make, and another $1,000 a year for three years as long as the homeowner remains current on payments. Homeowners who stay in their properties and are current will get a monthly balance reduction to help reduce their loan principal. That will amount to up to $1,000 a year for five years.
Also, banks would rather have you stay in your home — even if they’re not making the full amount they signed up for — rather than have the house go to foreclosure. They stand to lose more if you foreclosure than if your loan is modified.
Bottom line
It is estimated 3-4 million homeowners will benefit from this plan, but “[The plan] will not reward folks who bought homes they knew from the beginning they would never be able to afford,” said Obama. “In short, this plan will not save every home.”
Helpful reading:
- Read more about loan modifications in Zillow Advice
- Loan modifications: What to expect if you’re not currently late
- 5 Questions to Ask Your Loan Modification Lawyer
- Am I getting a good deal on my loan modification?
Take this loan modification quiz:
“Do You Qualify for a Loan Modification? You might. Take the quiz to see if you might qualify for a loan modification. Or, if you have a Web site or a blog, add the loan qualification widget to your site. It’s free and a fun little quiz to keep your visitors engaged. Plus, you get free co-branding.
- Stumble it!
- Categories: Foreclosures, Mortgages
Comments
72 Comments so far
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Tony Sena on February 20, 2009 2:17 pm
I don’t believe contacting your Lender will get you the best results in a Loan Modification. Remember the person on the other end of the phone is still employed by the Lender. Their job is to minimize their loss so why would they work with you to give you the best deal possible?
I send all my clients who want to keep their home to a local Attorney. I know it costs them $1500 up front but the deal an Attorney can get is a much better deal then the Lender would offer.
What is a bLoan Modification/b and Who Qualifies for One? | Zillow® Blog | Loan Modification Blog on February 20, 2009 6:12 pm
[...] Here is the original post: What is a bLoan Modification/b and Who Qualifies for One? | Zillow® Blog [...]
Rob on February 22, 2009 10:37 am
I don’t believe I/my tax dollars should be going to help “bail” anyone or anybody out of the poor financial decisions that they have previously made. Maybe if you fall into this category you should consider renting.
Who is Your Bank Connection on February 22, 2009 11:01 am
Listed below are some facts explaining why mortgage lenders are in favor of working with borrowers.
• All or a portion of the outstanding principal balance, past due mortgage payments, late fees, and lender costs may be rolled into the loan modification. This results in no lost revenue to the lender. Simply put, the amortization of the loan may be increased resulting in a lower monthly payment for the home owner at no loss to the mortgage company.
• Modified home loans use many repayment options to create a win win situation. In most cases, the mortgage lender will lower the interest rate and modify the variable term into a 30 or 40 year fixed mortgage. The lower monthly payments help ensure repayment by the borrower and create more interest earned by the lender over the life of the loan.
• Foreclosed homes are a hindrance on the lender as well as the borrower. When a bank forecloses on a home they are almost always guaranteed to loose money on the deal. Mortgage lenders have to pay real estate agents to list the home as well as any repairs required to make the home sale ready. Usually the home is listed at a discounted price, therefore causing the bank to loose money on the transaction. Add the slowing housing market to the equation and a loan modification seems a much more attractive financial solution for any lender.
• A modified loan accompanied with on-time payments positively affect the credit rating of a borrower resulting in less default within a banks mortgage portfolio. This is a benefit to the lender, speaking in bank terms.
Florida Loan Modification on February 24, 2009 7:52 am
Diane,
Today in Florida, the Attorney General just struck down an Orlando firm that was charging $2,500 for upfront fees for loan modification services, and I believe this bill should go a long way to curb this sort of abuse.
Also, to add to the list of reasons the bank wants to work with homeowners, is that it costs the bank an average of $40k-50k to dispose of a foreclosure, and this money is much better spent on payment reductions and working with the homeowner rather than simply foreclosing without any modification.
Terrence Askew on February 28, 2009 5:05 pm
If you are in need of a loan modification, you may want to check a company call NACA. Go to a search engine to find out more. They have helped some of my clients that who were not eligible for a refinance.
Prince William Homes on March 1, 2009 6:56 pm
It will be interesting to see how this plays out. All other attempts seemed to have produced very poor results at great expense to the taxpayers. They’ll also need a job to qualify!
Robert Ruppell on March 2, 2009 9:57 am
For struggling homeowners attorneys fees for modifications could hinder many from going through the process. If the government sets rules and regulations for modifications would not the banks have to honor these?
KADA on March 2, 2009 11:18 am
To Rob, who wrote: “I don’t believe I/my tax dollars should be going to help “bail” anyone or anybody out of the poor financial decisions that they have previously made. Maybe if you fall into this category you should consider renting.”
Everybody that’s facing foreclosure didn’t make “poor financial decisions”. Believe it or not, most of these people are hard working citizens who have been laid off, had their jobs outsourced, had medical issues, etc. All through no fault of their own. I don’t understand why so many people automatically assume if you need help with a loan modification then you made a bad financial decision. And keep in mind, these are the people who are actually trying to KEEP their homes, not the ones who just said “EF IT” and just walked away… whole different set of folks!
Beth B on March 10, 2009 12:15 pm
Due to my husbands loss of income we fell behind on our mortgage payments. I was so hopeless I started to pack because I honestly did not think there was any way you save our home. A very good friend of ours told us about a company that helped save their home called 21st Century Legal Services. So I called them and they modified our home loan to a very affordable monthly payment.
Meghan on March 31, 2009 4:29 pm
I just want to say that I was taken for 3500.00 by a modification company… I am not someone who is lazy or can not afford my home I fell extremely ill… What kills me is how all these bankers are being bailed out and buying 300,000, chairs and 30,000 toilets to flush my money down the drain……I URGE ANYONE and EVERYONE to go to AMFNOW.com I bought a pre modification package very cheap… I now know what to do and I am going to help My self and my Family… Not everyone who needs a modification is wrong… Hey the banks got modified nobody asked then any question…. Meghan
cam on April 1, 2009 11:58 am
To Rob, not all of us who are in trouble made poor decisions. My husband and I had decent jobs and were finally able to put a down payment on a house a year ago. Right before Christmas (5 days before to be exact), they cut my husband’s salary in 1/2. It was either that or lose his job. My job cut me back to 12 hours a week. Our daughter also had medical problems..we have rented an apartment for the past 5 years and it devastates me to think that for a year we were able to let our kids have their own yard to play in, only to possibly lose it through no fault of our own. We are working with our lender for a loan modification. We have a very small house, we did not buy above our means at the time. This is a very upsetting situation, as I’m sure I’m not the only one going through this. Don’t judge, you never know when hard times will fall on you and you made need some assistance.
Iowa Loan Modification on April 4, 2009 12:00 pm
IA LOAN MODIFIERS is a resource for Iowa homeowners to request a loan modification consultation from a network of loan modification providers who compete for your business.
If you are not an Iowa resident, you can visit “Your State” Loan Modifers dot com.
mike on April 9, 2009 3:36 pm
Thanks megan The anfnow site was a big help.It gave me the paper work I need to get the modification started. Rob it must be nice to have life under control. Maybe you could help the stock market along and buy some stocks or maybe you could buy some of our houses (homes) Go out and get the economy moving Rob obama is looking for a few good men like yourself
Obama has a refinance plan... | on April 12, 2009 8:04 pm
[...] What is a loan modification [...]
carolyn F on April 16, 2009 8:27 am
Is it safe for a “buyer” to contemplate leasing a home when the owner is doing a loan modification and perhaps applying the rent money to purchasing the home.
Thank you!
Robert on April 16, 2009 1:28 pm
Passage of a narrow minded man.
Rob on February 22, 2009 10:37 am
I don’t believe I/my tax dollars should be going to help “bail” anyone or anybody out of the poor financial decisions that they have previously made. Maybe if you fall into this category you should consider renting.
Bankrupcty Safe on April 26, 2009 8:54 am
They just dont get it
janet romanski on April 27, 2009 8:56 am
Hi Folks, just wanted to share some information regarding a organization that I recently had dealings with. I was at a point where a sale date for my property was set because of a modification company I used, out of Florida, did not conduct or submit the information that I provided to them to the bank. Basically I got ripped off. I contacted http://www.modfraud.org, which helped me get in touch with a local pre-screened attorney that assisted in recovering the funds lost and additionally postponed the sale. Although the case has not come to completion as of yet, within the last four weeks I have seen substantial results. Just FYI for anyone that needs some legitimate sources.
Michelle on April 30, 2009 12:12 pm
If your house is already in foreclosure will the loan modification stop that foreclosure process or is it too late?
Loan Modification on May 5, 2009 3:24 pm
Yes a loan modification will stop the foreclosure. You have to be procative and call your mortgage servicer ASAP!
Loan Modification Blog on May 5, 2009 3:25 pm
yes, yes, a loan modification is the key to stopping your foreclosure.
faye on May 6, 2009 9:25 am
hi i just wanted to know the requirements for getting loan modificatiuon plan in nj
like if you rent your house or condo can you still get a loan modification plan?? i dont live in the property . i rent it, i have adjustable rate
and i want to lower my rate down ..can anyone help?/
thanks
Loan Modification on May 6, 2009 2:36 pm
Aside from incentives, lenders want to modify to avoid the cost of foreclosure and losing a significant amount of money on the home. It is important to note that while many homeowners are facing hardship and cannot afford their current payments, and can show that they can afford the new payment, and as such are great candidates for modification, if it is not in the lenders best interest to modify (e.g. the homeowner still has a good deal of equity in the home) and the lender would make a profit off of foreclosing on the home, the homeowner will find that suddenly their lender is very, very difficult to work with and may simply deny the modification request outright. Friends, regarding lenders and large financial institutions, it has always, always been about the bottom line.
Los Angeles Bankruptcy on May 7, 2009 7:44 am
Many of these homeowners will need to claim bankruptcy after they recieve a loan modification. So, definitely get an attorney to helpo you in the process.
Loan Modification Forum on May 7, 2009 7:46 am
Faye,
You can try the forum at http://www.LoanSafe.org for help. We have saved over 250 families for free on the internet.
I wish you the best!
joe on May 7, 2009 7:14 pm
The best way to find out the qualifications, and saving money on your modification is to purchase a Do It Yourself Loan Modification. You will learn everything that the professional do and be able to duplicate it yourself
Loan Modification DIY on May 21, 2009 5:29 am
I agree or through an attorney.
Mitchell on May 28, 2009 11:10 am
If you have a fairly simple and straight forward case, a DIY loan mod might serve your purpose. http://blownmortgage.com/2008/02/04/loan-modifications-on-your-own/ is a good reference article. Loan mods can take months though, so you have to follow up and make sure that you’re application isn’t just sitting in a pile of some desk…this will require lots of phone time. If you have a complex case, you don’t want to deal with the hassle, or you suspect that there could be something wrong with your original loan documents (quite possible if your loan originated between 2004 and 2007), you might want to consult a loan attorney. Beware of scams, so go with a reputable firm with experience modifying loans and connections with loss mitigation departments.
Justin Brain on June 2, 2009 12:28 pm
To get the best results do you research on the company your working with and ask for PROOF of what they’ve done (modification agreements from prior clients) You can see under the results tab on our web page MdfFinancialServices.com some of the actual loan modification agreements we’ve obtained for our clients theres about 10 cases on our site. Our company also has an “A” rating on the BBB. Email me or call me with any questions.
Chris Wilson on June 4, 2009 9:58 am
There are various outlets to accomplishing a loan modification. Obvious, most borrowers want to do it themselves, as you should. The problem is that your claim carriers no wieght unless you have legal representation. Your lender will continue to string you along or high ball you on an offer that only benifts them in the long run. You want permanent results. It makes sense to seek out industry specialists for this job if results do not come your way. This your home we are talking about, find someone who specializes in this industry for help. If you cannot get results on your own, its time to seek additional help and leave it to someone who knows the industry. Would you build a house if you were a customer service rep? No. You need a framer and a contractor to handle the building of a home. Its just common sense.
Many times borrowers do not want to pay upfront modification fees to outside companies. The only companies a borrower should be using is a HUD approveed counselor or seek attorney representation. This insures your investment is properly allocated and actually in use for your well being of your home. Many of borrowers are finding it more and more difficult to find the right person or send their documents into their lender in order to get a response. If diffuculties arise you may want to seek out specialists to take care of the situation. When it comes down to it, modification attorneys understand what the lenders are doing and how they are getting proven results on a daily basis. Find a reputable company, either DRE approved or Attorneys. These are the only companies that can charge an uprfront fee and hold legitamacy at the same time.
jp on June 9, 2009 7:01 pm
With recent changes it has become increasing easy to do your own modification. In fact, Chase Manhattan Bank has an outgoing message warning of the use of third party - for profit companies. Once you understand the formula that all bank’s are using to qualify customers, you can taylor your proposal so that you will have success. I did it. To see an actual before and after result and learn how get the guide click Do It Yourself Loan Modification
John G on June 20, 2009 6:16 pm
I tried going it alone with my mortgage company but was given the run around. I thought about a loan modification company. However, a few I looked up weren’t licensed by the DRE in California and with some of the horror stories of deal with some of those companies, I decided to go with a law firm in Orange County, Ca. Thanks to Parman Law Group out of Irvine, I was able to get my principal reduced and my apr lowered also. Now I’m paying at least 1/2 of what my mortgage payment was before the modification. Kudos to Parman Law Group. They treat you like a friend and not just another client.
Don Lipke on June 25, 2009 11:38 pm
It is valuable to get legal help when pursuing a loan modification. The key reason is that a high percentage of loans originated in the 2000-2007 time frame included legal violations by predatory lenders.
When these problems are discovered by legal experts who point them out to the lender, they have powerful leverage to negotiate very favorable terms for the client’s modified loan. See my blog at
http://MortgageHelpLoanHelpInfo.blogspot.com/
Bekah Thomas on June 30, 2009 1:37 pm
I see all the advice and tips on here but why waste your time with so many shady Loan Modification COmpanies? I went to http://www.FEDMortgageLoans.com. Qualified online got my pin number and called them and within 3-weeks my mod was done. Just a little advice stick with Governemnt Backed COmpanies!
AD on July 2, 2009 6:49 am
What is the difference between what banks did and what Madoff did? They swindled money from unsuspecting people and pocketed their life savings. Bernie got 150 years. I think it is unfair to him if we don’t do the same to the bank executives.
These people created a ponzi scheme where they artifically inflated the value and those who got into this chain in the end lost everything. As simple as that.
annette bingham on July 7, 2009 12:43 pm
I requested a loan modification from my lender, chase bank, way back in febuary. I have called them time and time again and always get some lame answer. Has anybody else experianced this with them?
Loan Modification Blog on July 11, 2009 6:00 am
Yes, Chase is a nightmare to deal with. It can take anywhere from 3-6 months to get a loan modification. I have seeen some homeowners go over 1 year. Just keep fighting and dont give up Annette!
You can get some answers to your foreclosure questions here http://loanworkout.org/foreclosure-questions/.
Good luck!
The Financial Suite » Loan Modification Resources – How You Can Stay In Your Home on July 11, 2009 8:10 pm
[...] 7. Who Qualifies for a Loan Modification [...]
Loan Modification on July 14, 2009 12:59 pm
If you are struggling with your mortgage payments or facing foreclosure, you talk to an attorney that specializes in home loan modifications.
Loan Modification on July 14, 2009 1:00 pm
For all the negatives that have been written about loan modifications, and there have been a lot, the option is far and away the best option for struggling homeowners trying to stay in their homes and preserve their credit scores.
Loan Modification on July 14, 2009 1:32 pm
For all the negatives that have been written about loan modifications, and there have been a lot, the option is far and away the best option for struggling homeowners trying to stay in their homes and preserve their credit scores. As property values have plummeted, the possibility of selling or refinancing the home has been erased. That leaves foreclosure, a short sale, or short refinancing as the remaining options outside of a loan modification for homeowners to resolve their issues with their lenders.
bob on July 21, 2009 7:58 pm
i ran into some financial trouble a while back and, well, needless to say it put me in a tight spot. i tried to have a modification done but with all the negative press i was concerned about who to choose. i found a company who seemed reputable and was charged a $2300 fee up front. after about 3 months with no results i became impatient. when i would call to check status they would have a different answer every time for why my modification wasn’t done. after 4 months my lender was foreclosing and i was on the brink of losing my home. in a panic to save the home that me and my family live in i searched everywhere for an option. i tried to do a modification with the bank by my self but they were blowing me off and making me jump through hoops just to get a call back. an attorney friend of mine, who did not specialize in real estate law, said he had heard good things about a do it yourself kit offered at http://WWW.MyHomeSavingSolution.com. tired, frustrated, and at wits end, i visited the site and purchased the package he recommended. i did this about 3 weeks ago and since then i followed the steps and it has worked amazingly well. i have spoken with my bank several times and we have come to a modification agreement which is being finalized this week. after all is said and done, i will have eliminated my past due balances and the bank gave me a 5.25% 30 yr fixed (as opposed to my arm which was at 12.25%) and they credited me $31,000 off my principal. i am no expert but the kit boasted a certain document that, as far as i’m concerned, was the reason for my success. once aware of the fsla document the bank contacted me within 24 hours looking to come to “an arrangement”. my attorney friend explained that the fsla (full spectrum legal analysis) was a tool that has been used for years by attorneys to accomplish just that, a successful modification. apparently there were legal infractions on my loan with the bank and thats why they were so willing to help. now… just for the record… yesterday, i contacted the modification company that i had hired and asked for a status (just to see what they would say). they informed me that the bank was not willing to do a modification on my loan and stated several reasons. knowing that they were lieing, i demanded to speak with the manager. after yelling at him for over an hour and explaining that i had done in less than a month what he had been supposedly trying to do for over 4 months, i threatened to call the atty generals office and i received a refund in full. later that day, i contacted the atty generals office and filed a complaint about that company only to find that they were allready under investigation. moral of the story is… this specific kit worked wonders for me and my family. my home appears to be saved and my children will continue to have a comfortable roof safely over their heads. at the end of the day that is all i cared about. so as a father, as a man who has been in this specific bind, and as a human being that wants to be able to do something good for others i am recomending the very same product i purchased at http://WWW.MyHomeSavingSolution.com. if this is able tohelp anyone out there then i have done my good deed for the day
Bob, NY
Free Loan Modification Kit on July 22, 2009 9:49 pm
I have witnessed first hand the nightmares that can happen to homeowners during the loan modification process. Your right on the money with most of your points in your article. We need to remember however that the banks are overwhelmed with loan modification requests…
jim on July 24, 2009 10:24 pm
bob,
i checked out the company you are referring to in your comment above, http://www.myhomesaversolution.com. they offer what seems to be a good product, so i purchased the 995 package. they were quick to get me my product, less than 48 hrs. the fsla report you mentioned seems to be a very detailed forensic mortgage audit. im familliar with them but they usually go for about 1500 or more. in my opinion they provide an excellent product, lets just hope it works. thank you for your advice.
all the best,
jim
Steven on July 26, 2009 2:28 am
There are many legitimate loan modification companies out there, what aggravates me is that every borrowers think they qualify for a loan modification. What credit ability is there to process a loan modification for a borrower who isn’t financial responsible? People are in financial trouble, why does the media assume that these irresponsible people will pay you after their modification will be done. Coming from experience, they will disconnect their phone numbers, and avoid you in everyway. I wish the media would disclose this matter to the public, not everyone is to screw people.
Mortgage modification on July 27, 2009 3:17 am
Thanks for given this informative post…
cliff on July 29, 2009 8:52 pm
Bob,
I also was referred to http://www.myhomesavingsolution.com
and was skeptical of course but went with it and it was the best decision that I made. The package I purchased included an fsla report which revealed several severe violations. Those violations were what the modification was based off of (i am sure of it since I was previously denied a modification).
I did not even realize that I was a victim of predatory lending. I am sure there are many other homeowners out there in the dark. You should not approach your lender without this package. I was given a discount code to pass on to family & friends.
the 10% discount code is rae1249
http://www.myhomesavingsolution.com
Good luck,
Cliff
Are Banks Interested in Modifying your Existing Mortgage? « MyBrooklynReport.com on July 30, 2009 7:35 am
[...] overwhelmed with requests by homeowners for loan modifications, are prioritizing new loan business over defaulted mortgages. In addition, many lenders have laid [...]
100% mortgage on August 14, 2009 11:04 am
I guess everyone is all starting to struggle at the same time, maybe the brokers need to employ some admin staff to help, and create some jobs.
Rob Schmidt on August 16, 2009 2:37 pm
I found your site as I was looking for ideas to get my own loan
modified as seems a shame not participate in a way of reducing our
house payment. When we spend less on housing we can all stimulate the
economy with our spendable cash. Right?
Do-it-yourself-home-loan-modification
Release Equity on August 23, 2009 3:10 pm
I do agree with Rob on this point.
Rocky Mortgage on August 23, 2009 3:14 pm
I think that to assume people are generally in the picture is wrong, treat all customers at first like they know nothing and then update your info as they explain their knowledge - then you cannot be guilty of leading them astray.
Bev on August 25, 2009 1:52 pm
I just purchased my home in Nov 08. I received notification from my mortgage lender on today that due to the incorrect (property taxes) amount listed on the good faith estimate and my closing papers there’s not enough in my escrow account. I have been notified that in Oct 09, my house payment will increase by $223.00 per month!!! I cannot afford this, what can I do?
Chris Wilson on August 25, 2009 2:50 pm
Bev, you may want to consider a forensic loan audit. Possibly, there is a violation- maybe your tax assessment value is off as well..If your rate is high, and you have a hardship you may want to consider a modification- best of luck
chris on August 30, 2009 2:19 pm
I have been a financial consultant for over 20 years. I have worked for 4 fortune 500 companies from coast to coast. With our economy in the troubled times that we are currently dealing with, I have noticed more and more loan modification scams in the news almost daily. From companies taking money and doing nothing to instructing homeowners to stop paying their mortgage because a modification was going to take care of everything. With all of the negative press as of late, I found myself thinking that there is no way to know who you, as a homeowner, can trust with this process. As a family man myself, I have always considered ones home to be an intricate piece of the American Dream. To be unsure of the security of ones home is to throw into limbo the safety of your family. And as an individual who values that family dynamic I set in my mind to find a way to help. Then it dawned on me, there are many kits available that offer a do it yourself modification kit and I have reviewed most of whats available. The one thing that is lacking from these kits is, in my opinion, the most important thing, the Forensic loan audit or FSLA report. The forensic audit is considered, in my field, the key to a successful modification; it is a full spectrum legal analysis. This basically means, a specialized analyst reviews all of your loan documents for federal violations. When violations are flagged they are prepared in a simple report that is the FSLA or audit. In my experience, federal violations are more common than sliced bread. Actually, over 83% of the home loans in America have several violations. Depending on the severity of these infractions, the lender is liable to a varying degree (documented in Section 6 of the real estate settlement procedures act, RESPA, 12 U.S.C. 2605). It could be as simple as adjusting your rate and giving you the option of a fixed rate or as severe as being fined, losing their license, and paying you 10 times the total interest to be paid on the loan. I have even seen homeowners wind up with the option of a loan rescission which wipes out the loan entirely. Confronted with these facts and my knowledge, I decided to partner with a long time business associate and very knowledgeable friend to put together a package that no one else offers. Our company offers the most efficient and complete home loan modification kit available on the market today. There is no home loan mod kit available that gives you the leverage that ours does. It combines over 20 years of professional experience in the home finance industry into one simple step by step process that was designed to give our customers success. Our forensic report is one of the most advanced in the industry. It has successfully been used numerous times in court against banks and has proved itself time and time again. When combined with our fool proof step by step guide it is the strongest leverage you could ever hope to have when dealing with your lender. our package gives you the do it yourself guide, the forensic report, an amazing bankruptcy guide that even explains how to stop a foreclosure sale after the date has been set, a short sale guide, a complete lender contact pamphlet that gives you the ability to speak with the same people at the bank that the pros do, and all forms you will need to complete the process right down to the fax cover letters.
Please take a moment to review our website @
http://WWW.MyHss.net
and feel free to contact us with any questions. Our team of experts is looking forward to helping you answer any questions you may have.
Thank you
Tim on September 3, 2009 7:00 am
I realy need a loan thank you tim
Free Loan Modification Kit on September 12, 2009 12:40 pm
This whole thing is really getting out of hand. There is so much false and outdated info floating around the web most people don’t know the correct thing to do w/ a loan mod….
Steven Lutman on September 14, 2009 1:37 pm
There seems to be a considerable amount of misinformation on this blog.
Foreclosure is not an outcome that most lenders want, simply because it’s expensive for them and they don’t want to become property owners. This is true, ESPECIALLY IF THEY ARE FACED WITH SELLING THE PROPERTY FOR LESS THAN THE NOTE. As a matter of fact, if you owe more than the current value and don’t have much equity, most lenders WILL NOT FORECLOSE, even though they will “puff up” and heartily threaten it to the nth degree! In fairness, it’s their right to do so, too!
The simple truth is that you simply DON’T NEED AN ATTORNEY to successfully complete virtually all Home Loan Modifications! Remember, what we’re talking about here, in nearly all circumstances, is changing the interest rate and/or term of the existing note to make it more affordable!
DEMONSTRATED EXPERTISE IN NEGOTIATING WITH THE BANK’S LOAN WORKOUT DEPT. IS THE REAL KEY TO A SUCCESSFUL AND SUBSTANTIAL LOAN MODIFICATION!!
The SIMPLE TRUTH is that most of the Attorney’s in the Loan Modification Industry DON’T HAVE THIS EXPERTISE! They are simply POSERS wanting to cash-in. They hire “debt negotiators” to do the work and charge a premium because of the professional storefront. Most of the debt negotiators aren’t that effective with Loan Modifications either, because they don’t have industry specific experience. For these reasons, HIRING AN ATTORNEY TO DO A LOAN MODIFICATION is a lot like hiring an Architect to oversee a kitchen remodeling job!
In fairness, I would recommend hiring a bankruptcy attorney if you are considering bankruptcy. Filing bankruptcy will stop foreclosure!
The company I work for has VERY substantial, industry specific knowledge of Loan Modifications. We also have a performance guarantee, a 100% Money Back Guarantee and reasonable program fees (well under $2,500).
We’ve are averaging monthly mortgage payments reductions from between 20 - 50% for up to 5 years and the conversion of existing loans to fixed interest loans with rates in the 4 - 5% range for the full balance of the mortgage term! Second mortgages are averaging principal reductions from between 70 - 90%! These are the averages from over 200 completed resolutions and we’ve never needed an attorney in any of these cases!
lena on September 16, 2009 4:09 pm
If I start loan modification, does the interest rate on my credit card debt is affected (increased) ?
Nick on September 22, 2009 3:38 pm
You can go the 3rd party route or do it yourself. Both have drawbacks and advantages. You might feel safer doing it on your own, but there is the risk of doing it wrong and getting denied.
Hiring a 3rd party company that takes your money up front requires a lot of trust that is hard to manufacture, but the reward is you are getting more expert help.
One way to vet a company is ask what their payment policy is. If they require advance fees, move on. You don’t need to be paying all that money without getting something in return.
I’ve been around in the loan modification industry since it started and have seen just about everything. I really believe “No Advance Fees” is the way to go if you are going to hire someone.
Home Loan Modification with No Advance Fees.
Robert Q on October 8, 2009 2:11 pm
To Carolyn F
It can be risky to lease a home if the owner is behind. Several renters have paid their rent and still been evicted due to the owner not paying the mortgage. You can have a special stipulation added to the agreement written up to have the owner disclose to you monthly that the mortgage is current.If it is not then you have an out with your deposit refunded to you. Make sure the owner places your deposit in an account specifically for holding your deposit.
This will give you piece of mind that you won’t come home to an eviction notice from the Sheriff.
lisa on October 9, 2009 12:39 pm
I have read your blogs and understand what you all are going through, I am attempting to modify my loan with my lender at this time, they have had all the information they requested since june 17,2009. I have not hear from them and I am suffering financially. I have not let anyone of my family know but I feel that I may just have to walk away. It is a very hard situation. I cry everytime I call my lender and they give me nothing but excuses. I have been a very loyal customer with my lender, never late until recently, always catching up and paying the late fees. My financial situation has changed in the last few years and because I was very good at saving I was able to maintain, but now my saving have become a crutch and soon there will be nothing left.
Ross on October 21, 2009 2:55 am
What’s up with these uncharitable remarks from folks not wanting to see their tax dollars ’squandered’? First of all, be nice. You have no idea why any particular person has found themselves in financial straights other than possibly yourself. Be a little open minded and open hearted. If it was happening to you, I guarantee you’d feel a whole hell of a lot different.
Second, if you’re still angry point the outrage where it really belongs. It’s not John Q. Homeowner with his honest effort to repay as much as he can of the loan that exploded in his face, it’s the investment banks and stock market firms that sold us all down the river in order to make billions, only to get bailed out to the tune of billions, out of which they are still figuring out ways to make billions!
Yeah, it’s all a disaster, but I don’t think we should let people drown just because the cost of life preservers went up.
debbie on October 24, 2009 4:14 pm
A few months back I contacted my lender (Wells Fargo) for a loan mod b/c my husband was out of work. I was told I had to go through a three month forbearance plan to see if I qualify. I was asked about my financial debts and my income (this was done at work on my lunch break so I was making guesses on most of the debts). The payments were actually higher than my mortgage payment. The first payment was okay b/c they started the plan a month later. The second payment was a struggle and I couldn’t make the third. They set up another forbearance plan for another three months. The payments were even higher than the last. I asked why and they stated that in order to qualify for a loan mod I would have to do this plan. So I agreed. This time I only got as far as the first payment. So I went searching for help and found this blog. I decided to go with http://www.myhomesavingsolution.com
I rec’d my kit and forensic report. Unfortunately no violations were found. I have worked on preparing my documents and plan on submitting them on Monday. I feel the amount to do this ($795.00) was too much. When you try to contact this company either on the phone or via email they never get back to you for days which is too long when you are scared of losing your home. Maybe if they found a violation I would feel different. During this time I have rec’d notice that no partial payments will be allowed (its 10,000+ or nothing) and that Wells Fargo has contacted a local lawyer to start foreclosure. In between all this I also have rec’d letters telling me that they are there to help. Boy am I ever confused. I want to know if anyone has had any success with Wells Fargo with a loan mod and how long do I have before the foreclosure actually takes place (I live in CT). Thank you for lenting me vent. Deb
Buy To Let Property on October 25, 2009 6:49 am
Its a good product for some but not all as there are pitfalls.
Sarah Fordham on October 26, 2009 8:47 am
It never hurts to talk to your lender about loan modification if it’s something you’re considering. With the fast changing financial landscape, they will doubtless be better informed on what their institution has to offer than you. It’s easy to presume you won’t find what you’re asking for, but you’ll never know until you ask. Remember, lenders have a number of very good reasons to want to keep you in your home, not the least of which are the current government incentives for loan modification.
mario juarez on November 6, 2009 2:49 pm
debbie,
I understand your frustration. its unfortunate to hear that your audit had no violations. my wife and i had found http://www.myhss.net here and i think thats the same site as the one you used. our lender was first franklin and we had fantastic results. fortunately, our audit showed that we had a few violations. we submitted everything in they way that they outlines and after some negotiating we got a deal that works. I think your right, it does seem like a lot of money, especially if there are no violations. but we priced around and the going rate is anywhere from $500.00 to $1500.00 so $750.00 seemed ok after we took into account that we got the book and all with it. i think in all fairness they provided a solid product, however, the outcome after using that product is not a gurantee and it did take us about 3 months to complete.
debbie on November 10, 2009 1:06 pm
Thanks for the comments Mario. I submitted my outline to Wells Fargo so now its a waiting game. Say a prayer for me. Deb
Ryan on November 18, 2009 12:09 am
At what point does a person’s assets work against them in getting a loan mod?. I’ve been out of work for 4 months and on unemployment. But I also have a fair bit of asserts saved up (almost the value of the loan), which I intended to use to get my masters degree. My house is worth ~ 190k and I have a loan of 170k. I’m currently in the pre-loan mod program for BOA. I’m trying to figure out if I should try to refinance or if I should try to do the loan mod.
debbie on November 21, 2009 11:09 am
Ryan, I am not a professional but I can tell you what happened to me when I tried a refinance and loan modification. A refinance is just like getting a new mortgage. You need to bring everything to the table: income, debts, assets (which would probably work in your favor). The problem with that for me was that I had to have money for a closing and my credit score was low because of late payments. For the loan modification I had to bring everything to the table again but this time there was consideration taken for my late payments and assets would have had to be liquidated. The loan modification program is to save your home. The banks don’t want to see that you have money that can be liquidated and payments not being made to your mortgage. I got my loan modification approval this week and I am saving over $600.00 a month in mortgage payments. I had to spend almost 800.00 on a loan modification kit but it was worth it. Good luck to you.
Ryan W. on November 21, 2009 3:16 pm
Thanks Debbie!