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Loan Modifications & Short Sales Explained
How does this modification or Short Sale Process work exactly, and are either a Good Fit for Me? Are these Options Also Available for Commercial Property as well?
By now most property owners have heard something about Loan Modifications. There are a few different types and some are not mod's at all so be careful and Do Have a Professional Guide you in this Process.
If you are currently having difficulty meeting your monthly mortgage obligation due to a recent interest rate recast or hardship, We have Solutions to Help.
We consult and act as your 3rd party liaison in the negotiation process with your lender to approve a HAMP Loan Modification, short sale or short pay-off. The Home Affordable Modification Plan often helps the home owner currently struggling to make monthly mortgage payments but Staying in their Home is the Primary Goal.
There are basically three different types of classification for what is known as a Loan Modification. The Federal Government created the HAMP Program specifically for home owners who have a legitimate reason and cause for their current hardship and meeting their monthly financial obligations; Temporary loss of employment or Job Gap, Health or Medical issues, Divorce, to name just a few that Qualify as a Hardship.
Frequenty Asked Questions (FAQ)
Q: How long does a Loan Modification take?
A: The process typically takes anywhere from 60-180 days. There is no exact length of time that can be given because there are a lot of different variables that can effect the process. The only way to ensure that the Loan Modification Process goes as quickly is possible is to prepare a legible, well organized and complete package to the Lender.
Q: How many times can I apply for a Loan Modification?
A: There is no limit to the number of times that you can apply for a Loan Modification. As circumstances change, you may be eligble for a Loan Modification in the future, even if you were already declined.
Q: How many times a week should I call my bank after submitting the modification?
A: As a good rule of thumb it is recommended that you call your bank at least once a week. You want to remain persistent throughout the entire process.
Q: What is HAMP?
A: The Home Affordable Refinance Program gives up to 4 to 5 million homeowners with loans owned or guaranteed by Fannie Mae or Freddie Mac an opportunity to refinance into more affordable monthly payments. The Home Affordable Modification Program commits $75 billion to keep up to 3 to 4 million Americans in their homes by preventing avoidable foreclosures. For more information about the HAMP program, you should also visit www.makinghomeaffordable.gov.
Q: Can I apply for a Loan Modification if I am in foreclosure?
A: Yes you are still able to apply and receive a Loan modification even if you are in the foreclosure process. In fact the banks are even more motivated to workout some type of solution because they do want to foreclose on your home. Because the situation is a little more distressed, make sure to get through to a negotiator and request a postponement or a stay on the foreclosure sale until the Loan Modification application has been reviewed. They will not do this automatically just because you send in an application, so be sure to speak to someone and confirm the information.
Q: How do I determine the equity in my home?
A: The market value of real property minus the total amount of all the mortgages and existing liens. Liens include but are not limited to; Property Taxes, Personal Liens, Tax Liens, etc.
Q: What is a Hardship Letter?
A: It's a Critical part of the Loan Mod Process; A letter written by the owner of the house to the bank detailing the financial hardship and details leading to the hardship. It is required when requesting a short pay or Loan Modification from the bank.
Q: What is the Loss Mitigation Department?
A: A department of the mortgage bank that is responsible for recovering funds from a delinquent or defaulted account. They are in charge of mitigating the loss that may result from the defaulted loan.
Q: What is a Notice of Default?
A; A document that is recorded and delivered to the borrower when default has occurred under a deed of trust. This initiates the foreclosure process, and the information is now public knowledge.
Q: What if my bank says they do not do Loan Modifications?
A: This is just not true. Many homeowners are running into this problem. Many of the homeowners that call into their bank are talking to customer service representatives that have no authority or connection to the decision makers in the bank. The Loss Mitigation Departments of almost all banks are responsible for approving Loan modifications. In fact many banks are being encouraged to adopt the HAMP program that was enacted by the Department of Treasury in March of 2009.
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