What is a Mortgage Modification?
ANSWER: A Loan Modification is where your existing lender agrees, through a series of negotiations and paperwork, to change the terms of your loan so that you will have an affordable payment.
A Loan Modification may:
(1) bring you current on your mortgage
(2) reduce your interest rate
(3) reduce the amount of your mortgage debt
(4) extend the term/period you have the repay the loan
(5) reduce your mortgage payment. In short, a Loan Modification helps you keep your home.
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Is a Mortgage Modification the only option?
ANSWER: A NW Loan Modification Center Consultant will review the alternatives available to allow you to keep your home. The key to avoiding foreclosure is your taking action and your honest communication! Only through open candid communication with our Consultants can we fully help you to stay in you home. For Homeowners having difficulties affording their mortgage payment, there are generally 7 options:
1. MODIFICATION: In certain circumstances, an investor may allow us to add the delinquent amount to your loan balance or temporarily, or permanently, reduce the interest rate. They may give you a "step-rate" in which they lower your rate and gradually raise your rate. And although not as common as many companies claim, they may agree to reduce your principle amount to assist in making your future mortgage payments more affordable.
2. BANKRUPTCY: A Chapter 7 or Chapter 13 Bankruptcy when filed will stop a foreclosure sale (with minor exception). A Chapter 7 filing provides several months of relief so that you might pursue a modification or a different method to save your home. A Chapter 13 filing would give you three to five years to come current on your home loan whether than be through a modification or simply catching up on your missed mortgage payments over 3-5 years.
3. FORBEARANCE: A forbearance plan is an agreement made between a mortgage lender and delinquent borrower in which the lender agrees not to exercise its legal right to foreclose on a mortgage and the borrower agrees to a payment plan that will, over a certain time period, bring the borrower current on his or her payments. That can include adding on any delinquent mortgage amount to the back of the loan or a separate agreement to allow for payments to catch up on the delinquent amount. A Professional will negotiate what's best for you with your Lender.
4. PRE-FORECLOSURE SALE: NW Loan Modification Center works with homeowners who have experienced some legitimate hardship and can no longer afford their home. The decision to sell your home under these circumstances is difficult; in addition, fluctuation in real estate markets may leave you in a situation where you have little or no equity. If this is the case we may be able to assist in the sale of your home.
5. DEED IN LIEU OF FORECLOSURE: In the event you can no longer afford your home and you can not go through the marketing efforts or foreclosure, you may voluntarily request to return the property to the investor. If a deed in lieu is approved (after proving an extreme hardship to your lender), you hand over the deed to the house to your lender and you walk away from it. This will show negatively on your credit report but it is not as devastating as a foreclosure would be.
6. A SHORT SALE: A Short Sale is where you sell your house for less than it is worth. You must prove to your lender that there was a hardship that no longer allows you to afford the mortgage payment and the lender must agree to accept the less than valued sale price.
7. LITIGATION: If there were irregularities in your original loan or in the subsequent servicing, filing or threatening a lawsuit to address the irregularities may be productive in achieving a modification of your loan.
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I'm in Foreclosure, Can I be Helped?
ANSWER: While it is true that your chances go down the longer you wait, until your home is auctioned off, no one can force you out.
A loan modification, bankruptcy, or initiating a lawsuit against your lender/servicer can stop the process even seven days before the sale date.
Participating servicers may not proceed with a foreclosure sale on an eligible loan until the homeowner has been evaluated for HAMP and, if eligible, a trial modification offer has been made.
Participating servicers must use reasonable efforts to contact homeowners facing foreclosure to determine their eligibility, including in-person contacts at the servicer’s discretion.
Foreclosure sales may not be conducted while the loan is being considered for a modification or during the trial period. Additionally, once a homeowner has entered into a trial period plan by submitting the first trial period payment, the servicer may not take the first legal action to initiate a new foreclosure.
However you look at it, the process buys you the time you need to get back on your feet while your lawyers work out a better arrangement with your lender.
Of course, it's always better to start the process early.
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Bankruptcy can actually HELP my Modification?
ANSWER: Bankruptcy actually provides some additional and very valuable tools to facilitating a Loan Modification Agreement.
First of all, filing for Bankruptcy stops the foreclosure or collection process while giving your team the time to prepare a modification strategy.
Additionally, many other options come into play such as eliminating a 2nd Mortgage. Perhaps you simply cannot afford to keep your home considering the debt of a 1st and 2nd Mortgage. But, after removing the 2nd, you alleviate that extra financial burden, making the modification palatable for you and your lender.
Please consult with one of our Attorneys on the many legal options available to you.
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What if I have bad credit?
ANSWER: First of all, if you are current on your mortgage, we strongly suggest that you do everything you can to remain current. No one from NWLMC or any of our associates will ever suggest that you stop making your mortgage payment. We always believe in "doing the right thing", regardless of the scenario. So, if you can afford to make your mortgage payment on time, than you should do so.
However, if you find that you are falling behind and there is nothing that you can to remain current, be encouraged... Your credit rating doesn't have anything to do with getting a Modification and you won't need to disclose your credit rating in most circumstances.
Your lender will want proof that falling behind was a temporary snag, and that you can afford to stay on track if they modify your loan. This means you have to have a job and a valid proof of hardship.
The bottom line is that the loan modification needs to make financial sense to your lender/servicer.
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What does a Mortgage Modification cost?
ANSWER: Presently, the NW Loan Modification Center performs HAMP Mortgage Modifications for only $1,995.00, which is half the National Average.
"Why so affordable?" you might ask yourself. Well, not to put too fine a point on it but, there is just no good reason anyone should charge you much more.
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Why hire a Modification Professional or Attorney?
ANSWER: Technically, you can do this yourself -- but it takes a lot more work and the results probably won't be the same. Just as some people act as their own real estate agents, accountants or legal advisors... you can prepare your own financials, your loan modification package and negotiate with your Mortgage Company on your own.
Consider this: How many financial transactions are as important as saving your home?
Like any important matter, having the proper guidance, experience and representation can make all the difference in the World.
The Loss Mitigation Department is one of a bank's busiest departments right now; a typical loss mitigation officer is handling as many as 800 cases at a time. These bank employees are overwhelmed and underpaid and do not have time to deal with your problem specifically and resolve it effectively. It's not uncommon for a loan modification request to be passed from one agent to another, and never get any real answers.
A loan modification attorney, on the other hand, can talk directly to your lender which will result in significant leverage to get your file to the top of the agents' stack. When a lawyer represents you, the calls get returned faster, you get more personalized service, and you gain the capability to actually obtain the type of loan you can need.
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How long does a Mortgage Modification take?
ANSWER: Loan modifications really do work, but they take time plus the right expertise and money. Depending on how far behind you are, the process can take anywhere from one to several months. An example might look like this:
Total hours it takes to work each file from start to finish is approximately 25 hours to 60 working hours. The following hours are approximations and estimates and each case varies.
Follow ups with the lenders (including hold times) 18.00 hours
- Accomplishing a work out solution 06:00 hours
- Processing; as much as 15:00 hours
- Quality Assurance 03:00 hours
- Negotiating and document review > 04:00 hours
- Fax, Email, Tracking 11:00 hours
But since it stops the foreclosure process, you won't have to worry about losing your home while the modification is under way. If you submit your paperwork on time and cooperate with your lawyer, you can speed up the process and avoid complications.
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If you still have questions, please visit our full Frequently Asked Questions (FAQs), page which includes a search and "ask a question" feature. If your question has not been asked and answered, submitting your question on the site will not only post it for others to review but also generate a direct response from one of our professional staff.
This valuable resource is constantly updating to keep the most asked questions highest on the list. So at any time, you can review the latest news, information and concerns that impact families just like yours.
As always, if you need to, please feel free to Contact Us. for a Free Consultation to review your circumstances, process your Mortgage Modification Application or just have a personal conversation about your particular circumstances. We are happy to help.
"There is Hope. You have Options." -- The NW Loan Modification Staff.
