Simply put a, loan modification restructures your existing loan to reflect new terms such as loan length, interest rate and loan type which you can responsibly afford given your present day financial condition. Today lenders are experiencing an unprecedented high rate of foreclosures which put significant financial pressure on them as a result of these failed loans. In some cases lenders have been forced to file for bankruptcy protection. The immediate future looks worse as hundreds of thousands of loans are due to “reset” or adjust away from the low interests rates of 3 to 5 years ago to much higher rates that the present owners cannot afford to pay. With Federal, state and local government encouragement, many lenders and servicers are now beginning to consider loan modifications as a viable tool to retain some earning potential for the existing loan while at the same time keeping possession of the home in the hands of the consumer. A common misconception is that you must be behind in your payments to be considered for a loan modification. While this was true for the most part, that is not the case now. In fact if you are anticipating a loan reset or if you have had a hardship befall you, the earlier we can work with your lender the better chance you have of resolving the issue while preserving your credit rating. If you are behind in your payments but have not yet received a notice of default placing your property into foreclosure, a common example of a modification might be where delinquent payments are made current by adding them onto the back of the loan. Your loan payments would remain approximately where they were BEFORE the payment rate & payment adjusted up however your loan term is extended out. Another approach we are seeing more and more is for the lender to agree to temporarily (2-3 years) reduce the interest rate allowing you a lower payment in order to catch up the arrearages and maintain your payments in a timely manner.
There are literally thousands of variations as to the types of loan restructuring that we can offer depending on your circumstances. As each lender is different and have varying requirements , and with industry and governmental changes occurring every single day, it is best that you speak with one of our counselors in order to determine which is best for your specific situation. We are able to be in constant contact with your lender and negotiate the best restructured loan possible.
ADVANTAGES OF RESTRUCTURING YOUR LOAN
- NO NEW APPRAISAL (IN MOST CASES)
- MINIMAL CREDIT CHECK OR MINIMUM FICO SCORE (in many Cases)
- NO REFINANCING OR CLOSING COSTS
- CURES YOUR PAST DUE STATUS
- PROTECTS YOUR CREDIT RATING
- ONE TIME, FLAT FEE FOR SERVICES
- ALLOWS YOU TO KEEP YOUR HOME EQUITY (if applicable)
QUALIFICATIONS FOR LOAN MODIFICATION
- CURRENTLY BEHIND IN MORTGAGE PAYMENT OR CLOSE TO IT
- Documented Proof of your financial condition and your ability to make payments under the new loan structure
- SHORT TERM FINANCIAL DIFFICULTY
- LOW OR NO EQUITY IN YOUR HOME
- Pre-hardship record of good payment history
- Currently in an Adjustable Rate Mortgage ready to reset
- Currently in a high interest rate fixed mortgage