by Upside Down Mortgage Loan Modification Expert - Dan North
There are plenty of Mortgage Loan Modification myths floating around that are assumed facts. Especially with so many upside down mortgages caused by the housing market crash. Get the facts! A lot more homeowners qualify for hardship loan modification than lenders are approving. Are you one of them?
If you were told you do not qualify or have to be delinquent on your mortgage payments to even be considered for loan modification, chances are you are being given a line by your mortgage servicer to drag out the loan modification process so they can charge the investor higher fees on your mortgage.
MYTH: Call Your Lender They Will Help You Modify Your Mortgage
It also depends on how long you are willing to sit on the phone to make repeated calls and sit on hold. Congresswoman Walters was willing to sit on the phone but did not find that lenders very helpful.
“The average American trying to negotiate a loan modification will not be able to get it done,” said Waters. “It will be impossible for them to get in touch with the right person, and even if they get in touch with a so-called counselor, they have a cookie cutter kind of direction that they go in.” Watch "Congresswoman on Hold on Bank Helpline". She no longer believes that myth.
Many that call their lender for help are given a repayment plan instead of a Mortgage Loan Modification. This means they have to make their regular payment plus make an additional payment to catch up. What kind of help is that? The homeowner already could not make payments, why would they now be able to make a larger payment?
Some people lose their home because they believed this myth.
Most of my clients did call their lenders before calling me. So if they were helped why are they calling me?
The other 10% of my personal clients did not bother to call their lender because they always hire a professional to handle things like this. They expect the best negotiated deal possible so hire specialists. That is the only reason they call me.
MYTH: You Can Not Modify A Loan If Your Home Is Upside Down
Upside Down Mortgage Loan Modification FACT: While you may not qualify to refinance if your current loan to value is upside down, that is not a factor for modifying a loan.
You are not asking for a new loan. You are asking to restructure the loan you currently have. This does not involve re-qualifying. The same goes for credit score.
However your income and expense documentation does need to demonstrate you can afford the mortgage loan modification you are asking your lender to grant you.
MYTH: You Can Not Modify A Loan Unless You Are Behind On Payments
Upside Down Mortgage Loan Modification FACT: While your lender may tell you they only do Mortgage Loan Modifications if you are 2 or 3 payments behind, that is just untrue.
What is really happening is that your lender is putting you off and hoping you will continue to make payments. As far as the lender is concerned you have made payments up till now, so if they can brush you off with a quick "NO" then they will.
You do not have to be laying on the floor bleeding to get help. You just need to get the lenders attention and get them to take you seriously.
The fact that you have made all your payments actually shows that you are a good candidate for help. You will continue to pay on time if you can afford the payments. Lenders can be convinced of this but like I said you have to get their attention and get them to take you seriously.
We have negotiated many Mortgage Loan Modifications where the homeowner has never missed a payment or been late.
In fact most of my personal clients are current and their lender previously said they did not qualify. You know what? We restructure their loan to a lower monthly payment!
MYTH: Investment Properties Do Not Qualify For Mortgage Loan Modifications
Upside Down Mortgage Loan Modification FACT: I do not know where that idea came from but I will answer that in one word, POPPYCOCK! (or is that two words?)
A loan is a financial transaction with a lender.
Your lender does not care what you spend the money on (short of fraud) if you pay it back with a profit.
If you can not pay it back, the lender only wants his money.
This is where mortgage renegotiation with a mortgage loan modification steps in.
You borrow $500k to buy an investment property. That property is now worth $250k. If the lender forecloses, they would be lucky to recover $250k if they can sell right away.
More likely the lender will end up with an empty property for months or years. An empty property pays $0 and the lender now has to pay someone to care for and sell the property. Those costs are going to come out of what ever the property sells for.
What if the property continues to go down in value? How much of the $500k is the lender likely to recover? The lender can be convinced to do something in their best interest.
This gives you a lot of room to negotiate a mortgage loan modification. You potentially can negotiate a
Bottom line, the lender will make more money if you keep the investment property and continue to make payments, even if you are paying less.
You are looking for positive cash flow on your property, so is your lender.
MYTH: You Can Not Do A Jumbo Mortgage Loan Modification
Upside Down Mortgage Loan Modification FACT:(First see the fact above) I do not get many properties over $1,000,000 but these are properties that lenders foreclose on fast. If you are behind 2 payments, you will likely hear foreclosure threats and may get a NOD (Notice of Default) filed at the court house.
Lenders also negotiate and modify fast on jumbo loans, if you are behind on payments. (note: not all lenders are fast, but they will handle jumbo loans faster than smaller loans when behind)
MYTH: If You Do Not Fit The Making Home Affordable Modification Program Guidelines You Can Not Get A Mortgage Loan Modification
Upside Down Mortgage Loan Modification FACT: Lenders have been doing mortgage modifications when it makes financial sense to them before Congress stepped in. Many borrowers will be helped by the Government Guidelines. Many more will not. For those who fall outside the guidelines it may still make financial sense for the lender to restructure the loan. Most of my clients fall outside those guidelines and do successfully restructure their loan.
Lender participation in observing Government Guidelines is voluntary.
You still have to negotiate and convince your lender that a Mortgage Loan Modification makes financial sense to them.
You will have to demonstrate and document that you can afford the payment you are asking for.
If you can not, you will need to use another option than Mortgage Loan Modification.
The good news is that there are other options and it still may be possible to stay in your home.
Apply for California No-Upfront Fee Hardship Loan Modification Find out for yourself. Apply for no-upfront fee hardship loan modification even if you do not qualify for the Government Making Home Affordable Modification Program. You may qualify for a No-Upfront Fee Hardship Loan Modification. (Currently available in California)
DIY Modification Kit Are you looking for a DIY Modification Kit that will walk you through the entire process of modifying you loan? Then read on.
What Is Mortgage Modification? Find out what Upside Down Mortgage Modification is, what it can do, how it can benefit you, what happens when it does not and what to do, plus how to do Upside Down Mortgage Loan Modification from a position of power. There is Hope for Homeowners. Something can be done about it!
How Does Loan Modification Work? Part 1 Upside Down Mortgage Loan Modification is simple, but you need to understand what it is and how it works so you are in better control of the outcome. How do you know if your lender is pulling the wool over your eyes?
How Does Mortgage Modification Work? Part 2 In Part 2 we go into examples of How Does Mortgage Loan Modification Work? Covering what your lender looks at before modifying your upside Down mortgage loan and what your lender requires.
Ask General Loan Modification Questions - Get Answers Get answers to your own Upside Down Mortgage Loan Modification questions. See what other visitors have asked and their answers. What do you want to know or need help with? Got a situation you need help with? Just Ask.
Ask Wells Fargo Modification Questions - Get Answers Get answers to your own Wells Fargo Mortgage Modification questions. See what other visitors have asked and their answers. What do you want to know or need help with? Got a situation you need help with? Just Ask.
Ask Chase Loan Modification Questions - Get Answers Get answers to your own Chase Loan Modification questions. See what other visitors have asked and their answers. What do you want to know or need help with? Got a situation you need help with? Just Ask.
The Upside Down Mortgage Loan Modification Blog The Upside Down Mortgage Loan Modification Blog - Find out what's new on the site, stay up to date with the latest developments in Residential and Commercial Modifications as well as Government Mortgage Assistance.
Mortgage Modification Answers Home Page Get real answers to the real questions on mortgage loan modification, government mortgage assistance, government help to stop foreclosure and other loan modification and foreclosure questions. Do I qualify for a loan modification? Can I save my home?
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