Loan Modification

With millions of homeowners stuck in toxic adjustable rate mortgages and no ways to refinance out of them, loan modifications may be the only way to assist struggling borrowers. This term is used when your lender modifies your current mortgage (same loan you have, only changes are made to the note) in order to work with you and make your mortgage more affordable. A modification to your rate, balance of loan, delinquent fees owed, term of loan etc. can be made by the Lender. In the past this was only used when a borrower was delinquent but now we will see it being used before someone is delinquent. This will be the hottest term and the best way to help you avoid foreclosure.

• A Loan Modification will change the existing mortgage note and give you a fresh new start in managing your home. Your account will be brought up to date immediately.

• With a loan "modification" We take the mortgage you now have and change the interest rate and payment requirements in order to achieve a fixed rate. A change in rates and payments does not result in the need for a new closing, legal fees, survey, appraisal, or taxes. In contrast, if you "refinance" a loan you'll be required to have a closing and forced to pay a variety of fees and taxes.

• Lenders are willing to negotiate when borrowers are facing financial difficulties and can't obtain other financing alternatives. National Loan Audits shows the lender why it would be in the lender's best interest to agree to a workout arrangement. In turn, the lender will reduce the loan interest rate, reduce monthly payment amounts or change other loan terms to allow for an affordable loan to allow you to avoid foreclosure. National Loan Audits brings the two parties of a problem loan together to mutually agree to a workout that creates new and better loan terms which are affordable and realistic. The hope is that the new loan will enable you to meet your obligations. And with National Loan Audits' detailed personalized financial analysis, this hope becomes a reality. You simply accept the loan that is affordable to you, and never need to worry about foreclosure.

Does my lender want to foreclose on my property and take my house?

That depends. Ordinarily, when a mortgage company forecloses on a property, they almost invariably lose money. They lose even more if they are forced to take ownership of the property. Because of the mortgage company's as well as the investor's likely losses on foreclosed properties, there are wonderful ways to either avoid going into foreclosure or to get out of it. This is the good news. The bad news is that your servicer may actually profit from a foreclosure sale, while the investor may absorb most of the loss. Moreover, there may be insurance polices in place that will reimburse the lender for any loss incurred as a result of a foreclosure sale, whereas no such policies exist for losses attributable to loan modifications or short sales.

What are "hardships" and do I qualify?

Here is an example list of hardships that lenders consider during the loan workout process:

• Adjustable Rate Mortgage Reset - Payment Stock

• Illness

• Loss of Job

• Reduced Income

• Failed Business

• Job Relocation

• Death of Spouse or Co-Borrower

• Incarceration

• Divorce

• Marital Separation

• Military Duty

• Reduced Income

• Medical Bills

• Damage to Property (natural disaster or unnatural)

What other options do I have?

Short sale:

A short sale occurs when a property is sold and the lender agrees to accept a discounted payoff, meaning the lender will release the lien that is secured to the property upon receipt of less money than is actually owed. 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 (DIL) is a disposition option in which a mortgagor voluntarily deeds collateral 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". A DIL of foreclosure may not be accepted from mortgagors who can financially make their mortgage payments.


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 Not Legal Advice

The information presented on this Web site is not to be construed as legal advice. Legal advice must be tailored to the specific circumstances of each case. Every effort has been made to assure that this information is up-to-date as of the date of publication. It is not intended to be a full and exhaustive explanation of the law in any area. This information is not intended as legal advice and may not be used as legal advice. It should not be used to replace the advice of your own legal counsel.