One of the most common questions homeowners want answered is how does a loan modification affect your FICO or credit score. There are a few pieces to this question and we will try to break it down in this post. While we will try to cover it here, wondering whether or not getting a modification hurts your credit is viewed as a silly question by many. Now we realize it’s important to protect your credit but at the same time, if you cannot pay your bills or you are struggling to put food on the table, you need to prioritize and realize that a loan modification could be your best option.
First, if you are already late on your mortgage, do not spend your time worrying about how a loan modification affects your credit score. This is because a late mortgage payment has already negatively affected your credit score so a loan modification will not be the reason your credit score has gone down. We can also point out the obvious reason not to worry about the credit impact of a loan modification. If you have missed one mortgage payment or more, you need to spend your time focusing on getting the help you need so you will not miss payments in the future. A loan modification that reduces your monthly mortgage payment will help you get your credit back on track because it will allow you to use the money you save by being able to pay your mortgage and your other bills on time going forward.
In general, a loan modification will not hurt your credit long term. That being said, when it comes to loan modifications and credit, every lender handles how they report to the credit bureaus a little differently. However, if you are approved for a loan modification and you meet the terms of that modification, it will not affect your credit. A lot of homeowners are getting approved under the Making Home Affordable Plan (aka HAMP or Obama Plan) and this plan requires three trial payments before your loan is reviewed for a permanent modification. During the trial period, the banks may report your mortgage to the credit bureaus by indicating you are under a modification plan, making payments under the government’s modification plan or as ‘paying less than agreed.’ Some banks or mortgage lenders will not report your mortgage payment status at all during the modification trial period and once the modification is made permanent, they will begin reporting your mortgage again like they did prior to the modification being approved.
Specifically, your bank or mortgage lender might indicate that a loan modification can negatively affect your credit and they will report you delinquent during the trial period. What they don’t tell you is that if you meet the terms of your loan modification and make the trial payments as agreed, they will correct your credit to show you paid as agreed and remove any negative reports on your credit report. In other words, there might be a short term negative impact to your credit but as long as you meet the terms of your modification plan then long term (6 months or more) there should not be a negative impact.
You have to understand that even when you are approved for a loan modification, especially when you are not behind on your mortgage, your bank or mortgage lender would much prefer you make the normal payment. By telling you that you will be hurting your credit, this keeps you from accepting the modification because credit is so vital these days and the last thing you want to do is hurt it. It is also a way for your bank or mortgage lender to determine if you really need help. Most people who warrant a modification are not as concerned with their credit as much as they are about keeping their home.
All that being said, no matter how your bank or mortgage lender reports you during the trial period, once you meet the terms they set for you and your modification is made permanent, they will go back and correct your credit. That is why it will not be an issue long term but short term it is important you know how it is handled since you could call your bank three times to ask them about this and each person will tell you something different as far as how they report the credit. They should all agree that the credit will be updated once the trial period is complete.
Needless to say, if you truly need help, then your credit should be the least of your concerns. If you can make your payment, even if you are struggling to do so, you need to examine your situation to see if you actually need a modification. As it mentions above, if you are late on your mortgage or you will be late without a modification, then do not worry about your credit. In this case, you want to get the modification done as quickly as possible to avoid missing more payments or worse case, losing your home.
As the unemployment numbers increase and the economy stalls, many homeowners who have missed multiple mortgage payments have received notices of default on their home . If you are behind on your mortgage, you know that you are served various papers from your lender constantly and it’s hard to determine what documents you should pay attention to.
This post is intended to guide you through the foreclosure process so you don’t lose your home without a fight. If you have already explored all of the options given below, go through the steps again to make sure you didn’t miss anything. This is your home and if you truly want to keep it then you need to educate yourself on how to do so. If you have tried for a loan modification under the Making Home Affordable Plan (also known as HAMP or the Obama Plan) and been rejected, try to find out the reason for the denial and submit another loan modification application correcting what was wrong with your initial application. It might take multiple calls to find out why your application was rejected but keep calling your lender until you get some insight.
There are some things you need to know to prevent unnecessary stress in your life. First, I recommend finding out and researching the foreclosure laws in your state. Every state is different as to how they process homes in foreclosure. That being said, you should know that no one will lose their home if they only miss one mortgage payment. There is a process and procedure in place for states and banks are required to follow the legal guidelines in your state. For example in California, if the lender follows the guidelines, this is what happens…If a homeowner misses three mortgage payments in California, a bank will issue a Notice of Default on your home. This notice is public record and that is why you receive so much junk mail asking to assist you or sell your home for you. After the notice of default is recorded, you have 90 days to reinstate your loan. After 90 days, you will be given notice that your home will be sold at the courthouse in 21 days. This is the fastest your home could be foreclosed so don’t panic and please continue to read this post to get more guidance on this.
Now if any homeowner in any state is already in line for a loan modification and you have a sale date set on your home, you need to call your bank right away and ask for the sale date to be postponed. They will agree to continue to postpone your sale date until they make a decision on your modification application. Applying for a loan modification does not stop the bank from accelerating the foreclosure but they will not take your home if they are still reviewing your application for a modification. However, you need to stay on top of them to make sure they have the documents they need and to confirm there is no sale date or they have postponed any sale date.
You will receive all kinds of letters in the mail from your bank or lender. If the paperwork sounds scary or threatening, that is the intention of it. Banks are trying to get your attention and sometimes the only way to do this is by sending you documentation that gets your attention by telling you they will take your home if you don’t pay your mortgage.
If you are behind on your mortgage and you have been issued a notice of default or received paperwork that is unclear to you, the first thing you need to do is call your lender to get status on your account. Yes, your lender calls you multiple times a day asking for you to make a payment but that is just collections calling you. You need to reach out to your lender to let them know you want to keep your home and you need their help. They will ask if you can make a payment and I recommend making a payment if they will take it. You don’t have to make more than one monthly mortgage payment even if they put pressure on you to. Just make one payment and this will help stall any foreclosure proceedings. If you don’t have the money to make a mortgage payment, then there is nothing you can do about that but you still need to call your lender. Do not ignore their calls because they could interpret this as you not wanting to work with them to save your home.
Typically, when you talk to a representative at your bank or lender, they will ask if you have applied for a loan modification or a loan workout. If you haven’t applied, you need to submit an application to them right away. Loan modifications can take an average of 4-6 months to get approved right now so you need to complete your application right away so you can get in line and get reviewed for a lower payment option. Again, even if you are behind many months or in foreclosure, you can apply for a loan modification and your lender will postpone any sale date if one is set.
You have a lot of options when you are in foreclosure. If you want to keep your home, you can do it but you have to be proactive and work with your mortgage company. Whatever you do, don’t ignore your lenders calls. Some homeowners in trouble have a tendency to agonize over their hardship but they don’t do anything to aid their cause. Ultimately, it’s up to you whether or not you save your home and improve your situation. Obviously, it’s a stressful experience but if you stay focused on the goal of saving your home by exploring all of your options then you will put yourself in position to be successful.
Most industry experts spend so much time telling homeowners how to get their loan modified, they don’t tell homeowners what to do when their application eventually gets denied by their mortgage lender. Unfortunately, about 80% of all applications get denied so it is obviously a large amount of homeowners that are getting overlooked.
These homeowners assume their situation is hopeless and promptly prepare for the worst case scenario. However, that is hardly the case but few homeowners know they still have options to try and keep their home.
First, if your application is denied by your mortgage lender, try to find out the reason why. At first, your lender might not tell you but call them 2,3,4 times (as many as it takes) until someone gives you insight. Just ask the customer service representative on the phone to read you what the notes in the system say about your application. Tell them no one is telling you why your application is denied and you want to know. The representative doesn’t have to tell you but there is always someone who will share this information with you but it might take calling them a few times and trying to pry it out of a few people.
Second, once you are given some reasons for the denial, you will review the application you sent to your lender. For example, you might have been told your income was too low, your debt to income ratio too high, etc. All of this is great info to get from your lender and you will review the application you sent to them to see where you can make changes. Yes, you can make as many changes to your application as it takes to receive an approval. Fortunately, in this regard, lenders are not very organized so they don’t keep track of the information you submitted (they will never admit this though). So if your debt to income ratio is too high, lower your grocery bill or gas expenses to reduce this ratio. Then you can resubmit your application. Again, you can do this as many times as it takes to get an approval. Sounds crazy but it is true. There is no limit to the amount of times you can submit a loan modification application. Just don’t make any changes to expenses that show up on your credit report. For example, if your car payment is $250 per month, you cannot change it to $175 because your lender will run your credit and see the actual payment. For credit cards, always just include the minimum amount that is required to be paid.
Now if your income is too low, there are a few things you can do. First, see if a family member in your household is willing to go on the loan modification application with you. This does’t mean they will go on the loan or title with you. It just means you are using their income to assist in qualifying for the modification. Some people have family members that contribute to the household expenses and you would be using their income to qualify for the modification. If you don’t have this option, then you can reduce your other expenses to lower your overall debt to income ratio which would help offset that you don’t make enough income.
If you are denied under the government’s modification programs (HAMP/Making Home Affordable, HOPE, etc) all is not lost. You just need to revise your application (based on feedback you received on why it was rejected) and resubmit to your lender. Then you will ask your lender to review your application for one of their other modifcation programs. Yes, all lenders have modification programs other than the ones implemented by the government. Lenders would prefer to give you a government program because there is financial incentive for them to do this but it’s not the only option. If you are rejected or denied under the government’s program, you just have to be persistent about letting your lender know you are experiencing a true financial hardship and you want to be reviewed for any other modification programs they offer. This applies if you make too little income or too much income and your overall monthly are expenses too high.
I’m a big fan of the late Randy Pausch and one of his sayings is that “brick walls are put up to see how bad we really want something.” In other words, you can achieve what you want but sometimes it’s going to test us and require a lot of persistence to get it done in order to break those walls down. As it applies to loan modifications, if a lender tells you no or denies your application, you just have to find out why, revise, and resubmit. Can the process be frustating, yes, but don’t lose sight of the goal which is to get your loan modified with a payment you can afford.
Many homeowners are experiencing the worst of this economy. They are experiencing both a hardship that doesn’t allow them to afford their current mortgage payment and their home is worth less than the total of the mortgages on their home.
What to do what to do… Homeowners are undecided as to whether or not they should fight to keep their home or elect to short sale their home. There are pros and cons to both scenarios and we will highlight the areas you need to consider before you make your decision.
First, for those of you who are confused about short sales, we will briefly explain what it means when you sell your home in a “short sale.” A short sale is when the value of your home is less than the total amount of loans on your home. Homeowners put their home on the market and it is priced at the current appraised value which would encourage offers from buyers.
One of the biggest misconceptions of short sales is that sellers have to pay their bank the difference in price. This is not the case at all. If your bank/mortgage lender agrees to accept less than the loans on your home, then the bank is accepting the loss. Typically the reason homeowners decide to do a short sale is because they can no longer afford the home or they have to move out of the area. Banks understand this so they agree to allow you to sell your home for less than the mortgage loan and the bank absorbs the loss. The bank will not only cover the difference between what your home is worth now and the mortgage loan on the home, they will also pay the realtor fees, unpaid taxes, and any additional closing costs so the sale will go through.
Most homeowners cannot understand why their bank would agree to a short sale and the answer is very simple. Your bank knows you are struggling and it is better for them to agree to a short sale now than wait for you to continue to miss mortgage payments or lose your home to foreclosure. From the bank’s perspective, when they agree to a short sale, they are making the decision to cut their losses. They would prefer to lose as little as possible and if the homeowner continues to miss payments and the home is eventually lost to foreclosure, the bank would only lose more money.
Whether or not you should modify your loan or elect to short sale your home are extremely personal decisions. First, you have to ask yourself why you want to keep your home so badly. Some people attach fond memories to their home and while the home might be the location these memories took place, it is usually the people in the home that make the memories. In other words, homes don’t laugh and cry and they don’t enjoy exciting sporting events or school plays and the pets will be happy as long as they still have you. That’s not to say you should not try to keep your home. You just need to consider whether or not you should fight to keep your home using a more business mindset and what actually makes sense for you.
If your equity is down hundreds of thousands of dollars and you can barely pay your mortgage or your other bills then you should figure out a payment you can afford. Ideally, that payment should be close to what it would cost to rent a similar home in the area since you will essentially be paying rent on your home until you can recover your lost equity. If the payment is realistic, then you should try to modify your loan with your bank. For example, if you are paying $2200 and your interest rate is 8% and if your payment was closer to $1600 you would be fine, then you might make a strong modification candidate. However, if your interest rate is 5-6%, it would be harder for your bank to get your payment drastically lower since the lowest interest they can go is 2%.
If you are only paying interest on your loan now, you should know that all modifications being approved modify the payment to include principal, interest, taxes, and insurance. For people just paying interest, their payment will not give them as much relief since including the principal in the payment will offset some of the benefits of a lower interest rate.
Overall, there is a lot to consider when deciding between a short sale and a loan modification. Just remember short sales do not require you to come up with any money out of pocket at closing. If you decide to go the short sale route, just make sure your real estate agent actually has experience with short sales. Some agents say they know how to handle short sales but the best way to be sure is to ask them for some references from previous clients.
If you are undecided on what to do, you can always try to first modify your loan. Even if you are in foreclosure, you can still attempt to modify your loan and if it doesn’t go through, you can then try to short sale your home. Most banks or lenders will work with you to postpone a foreclosure sale if you are waiting on an answer to a modification or a short sale. The key is to always be in communication with your bank/mortgage lender. That way, you will stay on the same page and you don’t get any surprises. Ideally, you want to call them at least every two weeks to get status on your modification or short sale package.
In closing, there is no right or wrong answer on what you should do. Ultimately, you have to do what is best for you and your family. Most people feel better if they try to modify their loan before pursuing a short sale so they at least feel they explored all of their options. Some homeowners want to save their home at all costs while others are ready to let go. You just have to determine what is right for you and when you decide what to do, don’t look back. The old sayings ‘everything happens for a reason’ and ‘everything has a funny way of working out,’ apply when it comes to this as well. No matter what happens, the sky will not fall on you and your family will still be by your side. Health and happiness will always be most important because if you have that, everything else becomes a lot more manageable.
Everyone wants to know the “secret” behind getting a loan modification done. Homeowners are looking for any inside information that will get them approved for a loan modification without having to pay thousands in upfront fees. With the Home Affordable Modification Program (HAMP) otherwise known as the Obama Plan or Making Home Affordable Program, the lenders have uniform guidelines that allow them to determine whether or not they can help you.
Thousands of homeowners have tried to work with their lender directly and did not have any success in getting their modification approved. For one reason or another, the lender did not approve their application. Then the homeowner gets discouraged and frustrated by their lender so they think another company will have more success.
What these homeowners don’t understand is that they got their application denied for a reason. Once this reason(s) is uncovered, it makes the process a lot easier. Loan modifications are not as clear on how to get approved and that’s why people pay a company to do it for them. However, most companies are just as unclear on the guidelines as you. They just sell themselves really well and after you give them some rough income numbers, they tell you that you are pre-approved and promptly ask for your money. If this is your experience, the first thing you should do is Google the company, input their name and the word scam. Then see what comes up. Either there will be minimal information or there will be customer feedback on their experience with the company that probably isn’t very positive. Doing this basic search will save you a lot of headaches down the road.
As for whether you should do your own loan modification, the main reason most people don’t do the modification on their own is because they are intimidated by their lender. What homeowners don’t realize is that no matter who does your modification, whether you go through a company or you do it yourself, you still have to gather all of your income and asset documentation together. You still have to complete a financial worksheet and the hardship letter. A company cannot do this for you no matter what.
The main reason we released the HAMP Guide was because we received calls from so many homeowners who paid a company thousands of dollars upfront only to never hear from them again or just never got approved and didn’t get their money back. We also hear daily from homeowners who say they want a company to do their modification because they tried to do the modification on their own and their lender rejected their application. Due to this result, the homeowner thinks a company will have more success because they didn’t know how to deal with their lender on their own.
Unfortunately, most of these homeowners learn the hard way that the result with a company is no different. Ultimately, when you fill out the modification application, you have to know how to do it. Most companies don’t tell you because they are so busy and since they already have your money, what is their incentive to help you?
Anyway, to make a long story short, we created the HAMP Guide to give people an affordable option to modify their loan. The U.S. is a huge country and people have house payments from $400 and higher so if someone is struggling already, it’s not realistic to ask them to pay thousands of dollars to someone to modify on their own. Yet, these same homeowners need help, too and no one should be at a disadvantage if they truly need assistance but don’t have the finances to pay someone to do it for them.
Everything we have utilized to modify loans with just about every lender is in the guide. All of the insight, the steps, and things you need to avoid. We show you how to complete the forms, how to negotiate, etc. We give you a guide that walks you through each step along with all of the forms you need to fill out. We will answer your questions via phone and you can fax us your completed forms and we will make the same revisions on your forms as if we were doing the modification for you. This isn’t a profitable venture for us. We spend so much time and energy coaching homeowners on what to do and we review the financial worksheet to make sure we exhaust every angle to get you the best modification.
Ultimately, the goal is to make your big bad scary lender look very approachable. Once you know what to do and what to say (and not say), the clouds will open up for you. Then getting the modification approved should be just a question of making sure you follow the steps.
Lately I’ve felt that lenders would prefer to deal with homeowners directly because they trust homeowners more than these outside companies who have developed a bad reputation for everyone in the industry. Lenders want to hear from homeowners and if you have a compelling hardship, they will do everything to help you. That being said, you need to know how to make sure they help you by filling out the forms to give you the best chance at approval. The way I look at it, you have nothing to lose if you at least try to work with your lender by using the guide. If it’s too hard for you (which it won’t be) you can get your money back. I just don’t understand why homeowners are so anxious to give $1000 (usually more) to a company without at least trying the guide.
You have no one to blame but yourself if you pay a company upfront because they told you they could get you some crazy low interest rate without seeing your financial worksheet. Going over numbers on the phone is not the same!
We are doing everything we can to reach out to you. If you question us, I can only promise you we have never misled anyone. We are the only accredited company on the Better Business Bureau site with no complaints and the only one with positive reviews. Before this is all said and done, we want to save as many homes as we can. Life is just too short not to be able to enjoy it.
Okay, you know you need a modification and the whole process seems a bit daunting. Well, I’ve got good news for you…
You can handle this!
It’s true. Anybody can handle their own loan modification with a little guidance and help on the side. Some people just don’t want to deal with their lenders and that is fine. However, your lender would prefer to deal with you and the process may even go faster if they deal with you directly.
What Are Your Options?
Okay, there are a lot of different options out there and that is what makes this whole process a little intimidating. You can use a third party, you can go through one of the free government services like HUD or NACA, or you can handle your modification yourself.
A lot of people just want to give their information to another company and let them deal with their lender. Sounds easy and that’s why it is too good to be true. All of these companies are overwhelmed with files and that’s not because their files are closing and everyone loves them. It’s partly because maybe they did some television or radio ads and they caught the eye or ear of a homeowner in need. Then the company’s phone lines were ringing off the hook and they had an overwhelming number of modification applications.
So what?
Well I can tell you first hand these companies don’t know what they are doing. How do I know? I talk to their customers on a daily basis. More than half of their clients come to us because they’ve never heard from the company after they paid the up front fee or they were told a lot of B.S. that just seemed a little suspicious. Then you go to the better business bureau website (www.bbb.org) and there are tons of complaints about the various loan modification companies. Furthermore, I just got off the phone with a consultant from another loan modification company who needed his own modification done. He wanted me to walk him through how to do his financial worksheet. The guy is a friend of mine so I didn’t want to put him on the defensive. At the same time, I have to tell you that I was afraid for their customers if the person handling the modifications for this company doesn’t have a full understanding on how to submit an application to a lender. It’s really scary and I feel bad for their customers.
What Can You Do?
Anyone who calls our offices knows we don’t mess around. We tell you exactly what you should do and sometimes it’s not what you want to hear. Because things have gotten so bad with scams in the marketplace, we’ve created a program for you to handle your modification on your own.
What’s Different About Our Program?
First of all, our program tells you EXACTLY what you need to get your loan modified. We try to break it down for you so you are clear on everything you need to do. We give you the forms and all of the information you would need to get your loan modified. When your filling out your financial worksheet, we will go over it with you on the phone to make sure it is done correctly and puts you in the best position for modification. Yes, it’s true this whole service is $97. Yes, it is $97. Everything we provide to you: program, forms, phone support, webinars with attorneys, etc. The total for all of it is $97. As you can tell, we are not trying to profit from this when you see al of these other companies charging you upwards of $3000 for your modification. Save your money and try it on your own. I promise you it’s something you can handle.
You can access the program at www.HAMPGUIDE.ORG. It’s called The HAMP Guide Program which is based off the “Obama Plan.” Believe it or not, I’m not trying to plug this program. If you purchase the guide, great. If not, I hope you find something that works for you. I’m just tired of everyone forking over thousands of dollars to these outside companies that don’t even know how to submit an application to a lender. They can sell you on the fact that they can get you 2% but they don’t actually know how to do it.
Why Should You Trust Us?
I realize trust is a tricky thing. The only thing I can say is that we have never had one complaint on the www.bbb.org site and I think we are the only loan modification company that can say that. It’s true. We only have people raving about their experience with us. We’ve been doing this ever since the market took a turn for the worse so its been awhile now. That’s why I don’t have to convince you. Other people are speaking for us and obviously they trusted us. We didn’t let them down. We won’t let you down either.
Did you know that since the “Obama Plan” was released in March, mortgage lenders have still foreclosed on 1.6-million homes.? Crazy isn’t it. The idea that mortgage lenders are going to stop the foreclosure process to help homeowners is a myth. They help homeowners who know what they are doing when it comes to following the loan modification application and submission process but every few homeowners know where to turn or what to do when it comes to getting a loan modification.
That is why we just released the HAMP Guide Program to walk homeowners through exactly how to get their modifications done under the Home Affordable Modification Program, otherwise known as the “Obama Plan,” or Making Home Affordable plan.
The HAMP Guide program offers access to the 10-Step method to negotiating the lowest interest rate and payment on your loan. The key with this program is that it comes with a financial worksheet in excel so all you have to do is plug your numbers into the worksheet and it calculates everything for you. That way you can make changes on the fly when you are working with your lender so they don’t have any advantage over you.
The best part about the guide is it explains in detail what lenders are looking for when they decide to approve a modification. We’ve done countless modifications under the Obama Plan and standard non-Obama modifications and there are a lot of abvious mistakes homeowners keep making that can be avoided. We literally tell you exactly what you need to do in the guide.
With the guide, you also get unlimited one on one phone consultations to help make sure you submit your application to your lender correctly. In addition, there are also live webinars with attorneys to answer your questions and give you insight on strategy to get the best modification. The whole HAMP Guide Program is just $97 and it’s available at www.hampguide.org.
The most common question we get is why do we offer all of this for $97. The main reason is that we were getting so many calls from homeowners throughout the U.S. who need help getting through to their lender. Most people didn’t know what to do or know who they could trust. Unfortunately, a lot of these homeowners came to us after paying someone thousands of dollars to another company without getting a modification because the company was shady and they disappeared off the face of the earth. These homeowners didn’t have any money and they desperately needed help so we told them exactly what needed to be done. Slowly but surely we helped these people get modifications and based on the success we had with these homeowners, we decided to make it available to anyone who needs it.
There’s not much more you can ask for in the HAMP Guide Program. You have the 10-Step Formula, unlimited one on one phone consultations, assistance from attorneys, and a monthly report to all participants with information on the latest applications that lenders are approving to make sure you are up to date on the best strategy to take on your lender.
Everyone is frustrated with the economy, appraised values going down, and worst of all with a mortgage payment you cannot afford. Don’t let the stress you are experiencing paralyze you and keep you from taking action. You are your biggest advocate. Believe it or not, lenders are listening to homeowners and they are approving loans but you have to know exactly how to submit your application, especially under the “Obama Plan.”
In the next post we’ll cover why the Obama Plan has a lot of areas that can trap you if your not paying attention. For example, rental income…Did you know it counts in your gross income which greatly affects your modification approval? It gets a lot of homeowners denied for modification because they are not paying attention and their gross income is highly exaggerated. We can show you how to avoid this problem so you don’t get rejected. Anyway, we go inside on all of this in the HAMP Guide Program at www.hampguide.org
Have you noticed that every media outlet tells homeowners not pay someone upfront fees to handle your loan modification? Yet, these same media outlets do not provide any solutions to homeowners on how to modify their loan if they do not pay upfront fees. Now if you’ve tried the free services offered by the government, you’ve probably found even less help there. It is frustrating to say the least and there were limited options for homeowners to get their modification done without paying ridiculous fees.
Well that’s about to change! Next week, www.hampguide.org is releasing a $97 guide that will assist homeowners on exactly how to get their modification done with the benefit of assistance from consultants and attorneys. The guide is in response to all of those homeowners who are trying to get modified under the government’s Home Affordable Modification Program (HAMP), otherwise known as Making Homes Affordable, otherwise known as “Obama’s Plan.” Whether you are late on your mortgage or not, you can qualify for this program. Helping people to modify their loan is a labor of love for us and something that is extremely personal. I’ve personally seen how mortgage lenders and banks are handling this crisis and now you have the help to show you exactly how to get your loan modified. This is not being done so you end up going through a company to pay thousands of dollars for your modification. Far from it. The HAMP Guide shares all of the inside knowledge of attorneys and every tool you could possibly need to get your loan modified. No information is held back. In fact, you will probably end up knowing more than your actual mortgage lender.
Before now, there wasn’t a hard copy of the information along with access to an attorney to provide to people so they could follow a step by step plan on how to get their interest rate and payment lower.
This is what the HAMP Guide at www.hampguide.org offers homeowners:
- Easy to follow step by step guide on exactly how to get your loan modified and negotiate the best rate and lowest monthly payment
- All of the forms and information needed to modify your loan and in the exact order your lender requires, including a contact log form to track all of your contacts with your lender
- Excel spreadsheet of your financial worksheet with all of the debt to income ratios already plugged into it so all you have to do is plug in the numbers to formulate the payment you can afford and what will get you approved
- Mortgage payment calculator in excel so you can determine the interest rate and payment you can afford and have it in front of you while negotiating with your lender
- One on one consultation and assistance from a team of negotiators, consultants, and attorneys to make sure you are taking all of the right steps to assure yourself of success
- Every week there is a live webinar for all of the homeowners who are HAMP Guide members with an attorney or negotiator on the call to answer your specific questions on your loan modification. You will also receive tutorials on how to fill out your financial worksheet along with inside secrets lenders don’t want you to know about the process.
- Every month you will receive a report documenting the experience of hundreds of homeowners who are working with their lenders to get their loan modified. This will give you an advance scouting plan on how to handle your lender and what they are saying to fellow homeowners. In other words, your lender will not be able to get anything past you because you will have a team of attorneys, negotiators, processors, and thousands of homeowners like you ready to back you up and work to make sure you get your loan modified.
Of course, there are a limited number of openings to utilize this service since it offers the one on one assistance with attorneys and consultants to guide you through your modification, along with a step by step guide on how to modify your loan, and a weekly live webinar with fellow homeowners and access to an attorney and loan modification negotiators who will answer everyone’s questions and give you the tips and insight on how to get your loan modified as quickly as possible. The whole process is actually easy to follow and takes a few simple steps that allow you to get your modification done quickly.
What’s the catch? Actually there is no catch except for the fact this guide will only be available to a limited number of people. Over the last several months, we have received hundreds of calls from homeowners desperately trying to figure out how they can get their loan modified without having to pay ridiculously high fees to a company that cannot give any guarantee they will actually be able to get their loan modified. Well now there is finally a solution…better late than never…
Everyone wants to know what lenders are open to modifying loans. Well as of late, we have taken on clients who tried to modify their own loan with Saxon, Home Equity, and Citi Mortgage to name a few. Unfortunately, the homeowners worked with the lenders for months but were only able to get their payment improved by a few dollars. Obviously that wasn’t going to work because these homeowners were under true financial duress.
Everyone knows a loan modification company cannot make promises since the mortgage lenders ultimately decide if they are going to modify the loan. However, we have been doing this a fairly long time and we have developed special relationships with all of the mortgage lenders, including Citi, HomeEq and Saxon.
Well this past week we were able to successfully modify loans with all of the above lenders. HomeEq (Home Equity Servicing) agreed to reduce a rate to 3% from 8.5% while Saxon cut another customers payment from $5,000 to $2200. It seems lately, our files with Saxon, Citi Mortgage and Home Equity are having a lot of success. Washington Mutual also reduced one of our client’s payments by 30% this week from what the homeowner was previously paying. We work with all of the lenders and if you know a lender, chances are we have worked with them. The larger lenders like Chase, Bank of America/Countrywide, Wells Fargo, HSBC, and WaMu are well known larger lenders but there are plenty of smaller lenders that are modifying right now (including credit unions).
If you have tried to do your own loan modification and you have a loan specifically with Citi Mortgage, Home Equity, Saxon, or Washington Mutual, we can help. The process still can take 90 days, sometimes more, sometimes less, but we have made great strides getting a lot of these mortgage lenders to finally see the light and agree to work with us to modify their customers’ loans. I mention these lenders specifically because it seems a lot of the people coming to us tried to do their own modification with these lenders had no success but we were able to get it done and our customers were happy.
Some people are still hesitant to go through a loan modification company and we understand due to the scams out there but if you have questions, just go to our website: www.LoanModificationFoundation.com and visit our blog to get your questions answered. If you still feel like you are lost and want to go through someone else to get your loan modified, we can help. Keep in mind; we are the only company that does not charge up front until your lender agrees to modify your loan. Regardless, please visit our site as a resource to get your questions answered because we don’t want homeowners to modify their loan on their own without knowing what to do. Lenders can be very difficult and slow moving so you need to be prepared on how to best modify your loan.
We’ve all heard horror stories about homeowners who have paid thousands of dollars up front to a loan modification company that not only could not modify their loan but could never be reached again. Basically, the loan modification company took the money and ran. Unfortunately it has been a common occurrence as homeowners are desperate to do anything to save their home.
Fortunately, there are things you can do as a homeowner to protect yourself. Below are signs that the company is Not running a scam:
- First, the company does not ask for any money up front. You do not want to pay someone until they confirm that your lender has agreed to modify your loan. Note that the modification process is taking a minimum of 90 days with most lenders so if they say you are approved within the first 30 days of the process then you should be skeptical. I don’t know any modification company besides The Loan Modification Foundation that does not charge up front. In discussing with another law firm last week, they confirmed the same that The Loan Modification Foundation is the only company they heard of that truly does not charge upfront fees. I think you will find this to be the case when you call other modification companies.
- The company does not make any guarantees as to the modification you will receive. The company should acknowledge that they have no idea what rate or payment you will receive until they submit your modification application to your lender. Since your mortgage lender is the only one who will agree to a modification, you want to make sure the company does not make any promises or guarantees to you just because they want your business.
- The company does not promise a principal reduction on your loan. This is also a common scam right now. Real estate values are going down and homeowners are frustrated with having to pay on a loan when their home no longer has any equity. Banks and mortgage lenders are not reducing the principal balance on first liens right now. Lenders are more open to principal reductions if you have a 2nd loan on a property but there is no benefit to a lender to reduce the principal balance on your 1st loan so they are not doing it. A company may try to get your business by trying to make you feel better about getting a principal reduction on your first mortgage but lenders are not reducing principal reductions on first loans. I know everyone is all about principal reductions because their values have gone down but there is no benefit to a lender to reduce the principal balance on your first loan. Why? It is because if the lender ends up taking your home in foreclosure or agreeing to a sale at any point in the future, the lender would end up getting less money because they agreed to reduce your principal. I will do a blog post on this in the future because I’m going off on a tangent.
Back to the original reason for this post… A company is not scamming you if they don’t charge you upfront fees and they don’t make promises they absolutely cannot keep. Of course, the only company I know that truly does not charge upfront fees is www.loanmodificationfoundation.com. It’s not a shameless plug, it’s the truth. If you are aware of any other companies that do not charge upfront fees, I would be happy to research them and if confirmed they don’t charge upfront fees, we will post them here. We are trying to do everything we can to assist homeowners to make the most educated decision when it comes to modifying their home.
