Every day when my staff and I talk to homeowners struggling with their financial situation, we get asked a lot of similar questions. Some of these questions include…

How much will the bank modify my loan?

Can they reduce my principal balance?

If I miss a payment, will they help me faster?

What if the modification they give me doesn’t help me enough?

These are just a few of the questions we receive and I will try to tackle as many of these questions as I can in my posts…

First, no matter what you hear, a company or law firm has No idea if your bank will agree to modify your loan and by how much. Until the lender receives your loan modification package and reviews it, there is no way of factually knowing what will be the result of your loan modification. First, as a reputable company, we have to see your income and asset documents in order to confirm everything you have told us before we can even begin to determine if you make a strong hardship case. Second, once your package is submitted to the bank and they review everything, only then will we be able to determine what can be done. The bank has the final say as to what can be done. Once we negotiate with them on your behalf, we hope to achieve a result that will allow you to make a mortgage payment that is comfortable for you which in turn allows you to keep your home.

Yes, we can usually tell once we receive the documentation from homeowners if they have a strong case to present to your lender. However, it is you lender that makes the final call. Any person or company that tells you otherwise or promises a certain payment or interest rate is just being irresponsible. Those companies are typically charging clients up front, too and then disappearing into thin air when they have your money.

To avoid being long winded, I will cover some of the other questions listed above in future posts. What homeowners need to understand is that not just any loan modification company can help you. Its not like when you wanted to refinance and you locked into an interest rate and were deciding on how much you were going to pay in closing costs, knowing that you were going to get similar terms from every mortgage broker you talked to. Typically, the loan officers selling you a refinance loan were inexperienced professionals who only had to know how to be able to read a rate sheet to help you. Now these same loan officers are struggling because refinance loans have dried up so they are trying to do loan modifications. However, its not as easy because you actually have to know what you are doing. You have to know how to calculate what payment the homeowner can afford, what forms to submit, how to package them, talk to the correct departments within the bank, and be able to negotiate the best payment for your borrower. Last but not least, the LM company  you work with has to make it a priority to follow up daily with your bank. Otherwise, you get lost in the shuffle and the bank will not review your home loan modification package. As a homeowner, you have to be wise enough to know that if someone is telling you exactly what you want to hear then something is amiss. Sometimes when we are down and out, we have a tendency to make sure people give us the answers we want even if they are not the reality.

In other words, as the old saying goes, “if it seems too good to be true, then it probably is too good to be true.”