What's a Loan Modification?

Brett,

How would you advise someone to go through the loan modification process? I have clients that have tried this to no avail, but they are not behind. They are just getting further and further in debt every month because they are borrowing to pay the mortgages.

Are there any reputable loan modification companies out there? How about an attorney? Would it be helpful to have an attorney work with the bank to get their attention?

Any thoughts would be appreciated.

Thanks.

Hi Brett

I am actually a Loan Modification Processor for an attorney in California. He does collect a fee(retainer) before the negotiation starts for a modification. The fact is that your average homeowner who in many cases did not understand some of these exotic option ARMS that they signed up for have NO idea how to get a loan modification done. It really is a detailed process and is just as scrutinized as when they purchased their home or refinanced it. I have personally helped about 50 people modify their home loans since September. It takes diligence and attention to everything that the bank asks for and quite frankly your average working Joe does not have the determination to get it done so they pay us to do it for them. There are bad "negotiation shops" out there but I am proud to say we have our Department of Real Estate License and our Department of Corporations License and we are doing everything by the book. In fact we have a money back gurantee, no modification, then no fee.

DON'T TAKE YOUR LENDERS 1st OFFER

If you are behind on your mortgage your bank might call and try to discuss your situation with you. If after an analysis of your finances, they feel that you will be able to make your payments in the future they are going to offer you a short term payment plan disguised as a loan modification solution.

DO NOT TAKE IT!!!

Your lender is not going to offer you something that is designed with your best interest in mind. They are going to offer you a solution that will get every dime out of you both short and long term.

A plan designed with their best interest in mind. If you are lucky you will barely be able to survive, if you aren't you'll be back in trouble again in the future. The fact that loan modifications are re-defaulting at a rate of 58 percent is no coincidence.

PRINCIPLE BALANCE REDUCTIONS

Principal balance reductions are not the norm and no bank is going to volunteer to reduce the amount you owe them. Loss mitigation managers have a responsibility to upper management and their performance is monitored for loss percentages.

Remember any losses have to be reported to stock holders. A principal reduction is a loss. If you owe more than your home is worth you have negative equity. If you have negative equity there is a good chance that you may be able to convince them to lower your principal balance in addition to lowering your interest rate.

Most banks and lenders will initially offer to defer your past due balance, temporarily reduce your interest rate and give you a few months off of making payments. This might be a good loan modification for you.

Be firm when you negotiate. Simply tell them that this is not enough. Explaining that this is a short term fix that will only delay the inevitable will help to convince them to do more.

Tell them that you need your interest rate lowered and fixed permanently, your loan re-amortized (stretched back out over a longer term) 30, 40 or 50 years.

Tell them you want your PRINCIPAL BALANCE REDUCED.

Many lenders have predatory loans on their books. Over 80 percent of loans closed from 2000 -- 2007 contain predatory terms. These predatory provisions can help you to negotiate a principal balance reduction.

Having a good attorney who has experience with RESPA & TIL violations analyze your loan documents might cost a few dollars but it could help you with your negotiations. If the attorney finds a violation you could wind up saving hundreds of thousands of dollars over the life of your loan.

You must avoid the urge to jump at the first offer your lender makes. Ask professionals what they think of what you are being offered.

Perhaps the attorney who reviewed your documents could look at the offer. Remember you can pay a professional to fight for you against your lender. If you do most of the leg work you should be able to negotiate a small fee for reviewing your file and rendering an opinion or some coaching.

A good loan modification company might also be willing to do these things for you.

Dan Harris
Loan Modification Expert

How Anyone Can Get A Loan Modification Approved

Hi Homeowners,

Recently I have noticed many posts on forums and blogs regarding loan modifications.

Alot of this information guides distressed borrowers to seek help from HOPE.

There are many organizations out there with the HOPE acronym in their titles. The most popular one is 995 HOPE.

Keep in mind that these organizations are only going to assess your finances and give you some advice. IF THEY think you qualify then they will contact your lender and try to help you get a modification.

I have seen many homeowners who were initially told by these well meaning individuals that they didn't qualify and should short sell their homes. Only to find out later that they indeed could get a loan modification.

Often I see suggestions that recommend an attorney, and if you are facing an imminent foreclosure that is probably the best advise.

A few things to know about modification:

The numbers you send to your bank have to make sense. Write them down on paper and do the math.

If you are not able to demonstrate an ability to make payments AFTER a reasonable modification (5 percent - 6 percent 30 year fixed) you will not get one approved.

Depending upon your lender, there are a number of ways they will work with you. I have personally negotiated with most of the lenders and servicing companies left in the market.

When you call your lender they will offer to send you a package to fill out. Don't be discouraged. If your lender said they were going to send a package, they will and it should take 3 - 5 business days to receive it. If you haven't received it in a timely manner, follow up by telephone.

Most importantly you can begin to take control right now TODAY. Gather the following:

Last 4 paystubs for everyone in the house who earns money. If you don't have paystubs, you will need a cash letter from the wage earner defining what they take home monthly. (Yes your lender WILL accept this)(It's in their best interest).
2 years W2's for each wage earner in the home.
2 years tax returns
2 months bank statements - (PSST... If you have big bucks in the bank, your modification will not happen!) Your lender will require ALL pages of your statements. If you don't have them, go to your bank and get a 2 month printout, make sure that someone in the branch stamps and signs the printout or your lender may not accept it.

That should be the extent of documents you will need to provide to your lender. (unless you are self employed).

The above documents will be required to be submitted to your lender. Make copies of them now so you are prepared and ahead of the game.

YOU CAN DO THIS!!

Dan Harris
Loan Modification Expert

PART 2 of a 3 part post...

Now gather ALL of your bills and make a COMPLETE list of ALL of your monthly expenses, food, transportation, tolls, gasoline, heating bills, electric bills, water bills, trash & sewer bills, car payments, all forms of insurance, child care, tuition, camps & clubs, school lunches, pet food, etc.

Absolutely every dollar you spend needs to be accounted for, lest you underestimate your living costs and negotiate a modification that won't work.

OK... Now your rolling!

Get your totals down on paper and do the math. You may very well be in the red CURRENTLY, but calculate what your new payment would be and do the math again using your new modified payment. If you're above water with the new number you are well on your way to a new life, with one less worry.

If you want more guidance I am here, and would be more than happy to help. I have negotiated MANY, MANY modifications with lenders and know the ropes.

I do not think the average person needs a professional to negotiate a modification, unless the time frame for foreclosure is closing in.

My experience with MOST attorneys is that they are aloof, unreachable, unresponsive and condescending. If you can find one with empathy God bless you, but you don't need a professional to get a modification from your lender.

Note to self and YOU:

If you are in danger of imminent foreclosure then you need an attorney right away.

Get Ready, Get Educated - Get Modified and Get on with your life...

Dan Harris
Loan Modification Expert

PART 3 of a 3 part post... FINAL

GOOD LUCK!!

Once the income and expense situation is in hand you will need to put together some other info:
Monthly Income & Expense Letter
Hardship Letter
Loan Modification Proposal

There a number of acceptable hardships and you should review them to see which ones apply to your situation.-
Adjustable Rate Mortgage Reset-
Payment Shock-
Death of Spouse of Co-borrower-
Damage to Property (natural disaster or unnatural)-
Divorce-
Failed Business-
Illness-
Job Relocation-
Loss of Job-
Incarceration-
Marital Separation-
Military Duty-
Medical Bills-
Reduced Income-

Your loan modification proposal should lay out concisely each piece of the modification you are requesting, ie; principal balance reduction, interest rate reduction, waiver of fees and penalties, payment deferment or forebearance, and other info.

If you are behind on your mortgage, loan modification may be the perfect solution. Many a distressed homeowner have negotiated a loan modification and saved their family home from foreclosure.

You can too!

Dan Harris
Loan Modification Expert

The refinance boom is over and the real estate bubble has popped.

More than 30 million Americans' are upside down in their homes with negative equity.

Formerly hot markets in New York City, Arizona, Washington, D.C., California and Florida are now suffering without buyers or even prospects. Many previously booming markets are seeing double-digit declines in sales. In Florida the drop in home prices is staggering, and this has become ground zero for the real estate bust.

When prices fall, and they certainly have, that's a problem. Nationwide real estate property values have fallen. So properties that people bought at the peak of the market might be 75% of the value they paid, and unless they put at least a 25% down payment into the property, they're "upside down", and owe more than the property is currently worth. Being upside-down is not a big deal if you have a sustainable loan. You just hang on, and eventually things will go back to normal. You simply make payments until the balance goes down, values will go back to at least where they were, and all will be right with the world. When interest rates drop while you're upside down, you're in no position to take advantage of them. After all what lender is going to lend you money if your home is worth less than you owe?

The longest-running home loan refinance boom in the history of the mortgage industry has come to an abrupt end. The dramatic and sudden collapse of the mortgage refinance boom has sent shock waves throughout the mortgage and real estate segment of the Nations' economy. Loan officers are being laid off en mass. Lenders are rethinking their loan product offerings and credit criteria.

The prospects in the housing and mortgage markets for the immediate future are bleak. However, while the outlook for mortgage brokers is expected to decline over the next year or so, people involved in working out loans with loan modifications will definitely hear their phones ring more often.

Bring on the "Loan Modification Boom".

With little chance of refinancing, borrowers and lenders alike have to find a way to make corrections to the millions of bad loans that are on the books. It's the latest craze in the mortgage business. Basically, lenders are undoing everything they did. The mortgage crisis has borrowers and lenders alike trying to renegotiate new terms to correct the problems with these bad loans.

This time you don't need an appraisal, good credit, or equity. You simply need to have a situation in which your current mortgage is unmanageable. Whether it's a hardship that has you behind in payments, or a skyrocketing ARM adjustment that has you behind the 8 ball, all you need is a little bit of knowledge and some persistence and you too can jump onto the loan modification.

DAN HARRIS - ALL RIGHTS RESERVED

Teens are becoming more money oriented. Ask them what they want and more than likely they'll answer money. If it's not money, it's probably a cell phone or car but money will soon become number one on their list. Some kids make their parents feel guilty for not having enough money. And some parents go way out of line just to satisfy their children desires – even if it means getting a payday loan. Raising teens is a topic that many parents struggle with. Adolescents are the hardest to understand. Adolescence can be the most exciting or the scariest time in a young adult’s life. What's more, many teens believe it’s absolutely crucial to own the latest trends and hottest technologies to fit into today’s society. However, does your teenager really need a cell phone or the most recent iPod? Should we take out a payday loan to support all of their "wants?" I found an article that talk about ways to teach teen children to work for what they want. Simple things like shoveling snow will give them an insight on how important money is. They will understand the hard work behind money-making and the consequences of irresponsible use of money. You can learn more ideas on raising teens in this article from the <a title="READ Raising teens with the help of payday loans and maybe medication" rev="vote-for" href="http://personalmoneystore.com/moneyblog/2009/01/14/raising-teen... loan</a> blog.

Aloha Dan,

I am in the process of trying to do a loan modification for myself, but have many questions. Your blog helped me to answer some, but can you help me on a few more?

I am self-employed. How do I figure my income? Do I base it on the gross or net income? Do I add back to my income paper losses? And what are the required ratios of left over income in qualifying for a loan modification?

Any advice you can provide me in this area is greatly appreciated. I tried going to a professional, but they wanted to charge me $2,500.00 up front. If I had the money I wouldn't be in this situation. I look forward to hearing your advice.

Dan,

I am currently in a loan that is about to go adjustable. I also have a second home equity line of credit. My primary loan is $232,000. It was a 5 year fixed interest only loan. My second loan is for $75,000 and was acquired with a refi using electronic valuation that put the value of our home at $419,000 at the time. Although the value of the home could never have been justified at that amount. My second loan is a fixed 5% principle and interest loan over 30 years. My current value of the home is approximately $210,000. I live in an area of Northern California that was considerably over valued a few years ago. My question is....I can currently afford the terms of my loan but in two months when it goes adjustable I will not be able too. Will my primary lender be willing to work out a loan mod with me while I have a second on the home? Will lenders do a loan mod that allows interest only for a period of time. I do not see how I could pay principle and interest even at a fixed 5%.

Hi member1911099,

I have a few questions...

Who is your lender?

Are you behind on your mortgage payments?

How far behind?
____________________________________________________

When it comes to a self employed borrower the lender will be looking for proof of income in the form of 6 months bank statements and a P&L statement or 1099's. They will also be asking for your past 2 years tax retruns.

At this point the lender will only care about NET spendable income.

Debt to income ratios depend on the lender / servicer / investor.

Don't be concerned with debt to income, rather look at your end of month surplus or shortfall.

So if you have a net income of $5,000 and monthly expenses of $5,500 you have a monthly shortfall of $500.

In that case you would be petitioning the lender to make some sort of modification that would make up the $500 difference along with a bit more to insure that you can sustain the modification.

I hope that helped to answer your questions...

Dan Harris
LoanModBook.com
HomeRetentionGroup.com

Hi member1911665,

Many lenders will make a modification for anywhere from 2 to 10 years that is designed to give you breathing room.

At the very least you should be able to achieve a rate freeze on your ARM that will forego the rate increase for some period of time.

There are certainly interest only loan mods being made and you can see examples of completed loan modifications and their terms here:
http://homeretentiongroup.com/Examples_of_Success.html

A loan modification will not affect the lenderss lien position so the 1st lender will not care about the fact that you have a 2nd mortgage.

You may be able to negotiate a modification with the lender on the 2nd that would give you a rate reduction for a few years and go back to the 5% fixed after a while.

I have negotiated modifications on 2nds that allow for principal reductions.

I recently eliminated a 2nd mortgage that was $80,000 for a one time payment of $3,000.

Now that's a tremendous break!

Regards,
Dan Harris
LoanModBook.com
HomeRetentionGroup.com

Dan,

This is an interesting and long set of questions. I am a story teller so please bear with me, it will be greatly appreciated.
I am a 21 yr old male that bought a house in December of 2007 with a friend (not in relationship with him) for $140,000 We got an interest rate of about 7% fixed for 30 years. (FYI this is in St. Louis, MO). We still owe 139,000 after a year of payments. Unfortunately I was fired from my job on 12/31/08. I owe a very large debt to many different institutions, which was not a problem with the job I had. I want to get off of the loan and I have other arrangements. The problem is that my roommate is willing to refinance just into his name and have a different roommate move in, but we do not have the equity in the home or the capital to put any money down. With the current housing market we are upside down about $15,000 in the home.

Q1
Would a loan modification have a possibility of allowing my name to be removed from the loan. (My roommate has the credit to be able to refinance)?

Q2
If that is not possible how would I get my name off of the loan.?

Q3
How is this going to effect credit score if any at all?

Please help me in any way you can because there is no possiblity for me to get a job paying anywhere close to what I was making for at lease 2 years when I finish school.

The main goals are:
To get my name off of the loan completely
To get the payment amount down, whether it is principal or the interest rate

I appreciate anything you can do for me and if there is any other info you need please let me know.

Thank you for the help,
Karl

My father inlaw just did a loan modification and it was quite successful. He had tried two different companies because the first company did not seem to be making progress. The second however was very helpful, in fact they told him that whether or not he decided to work with them that he needed to do the following with any company he chose, in order to protect himself.

1. Request Law credentials. This is because it is unlawful for any company to collect an up front fee for this without a lawyer performing the loan modification.

2. Request proof of their best loan modification.

This was one thing that set them apart from the others. Then they got his modfication from 6.5% down to 4.2% interest fixed for 30 years. They got his defualt payments forgiven and he did not have to make his payment for 4 and a half months. His total monthly savings form his old payment to now was $509

They are called Foreclosure Prevention Services and their phone # is 949-940-0114

I hope this helps

Posted by member1914645 on 01/28/2009 8:46 PM
My father inlaw just did a loan modification and it was quite successful. He had tried two different companies because the first company did not seem to be making progress. The second however was very helpful, in fact they told him that whether or not he decided to work with them that he needed to do the following with any company he chose, in order to protect himself.

1. Request Law credentials. This is because it is unlawful for any company to collect an up front fee for this without a lawyer performing the loan modification.

I have a better idea....

<B>1st - Ignore any anonymous post recommending any service</B>

<B>2nd Find someone who puts thier money where their mouth is NO up front fee and pay only if success is achieved</b>

The fact that an attorney can take an upfront fee doesn't mean it's a good idea to pay one.

Please save your advertising spam for other sites.

Dan Harris
www.LoanModBook.com
www.HomeRetentionGroup.com

Ok...

Here goes...

Q1
Would a loan modification have a possibility of allowing my name to be removed from the loan. (My roommate has the credit to be able to refinance)?

A loan modification does not alter the major provisions of a mortgage so you would not be able to take your name off of the loan.

Q2
If that is not possible how would I get my name off of the loan.?

3 ways -

a) You could have someone assume the loan, that means that they would need to qualify under the guidelines of your current lender for a refinance.

b) A short payoff / refi, this would allow someone to QUALIFY for a refinance and you would negotiate a short payoff with your current lender.

c) Sell the home in a short sale

Q3
How is this going to effect credit score if any at all?

Your credit could be affected in a number of ways.

Late payments
Public Records - Lis Pendens, Foreclosure, Judgments

A loan modification does not in and of itself affect credit as it is simply a non reported change in payments.

Dan Harris
www.LoanModBook.com
www.HomeRetentionGroup.com

Dan,

If you say not to take advice from random posts, then do you have any suggestions on what companies to use that have been successful. We also tried refinancing, but our value-what we owe puts us upside down and our only possibility is an FHA loan, but it still requires 2% equity in the home to refinance. If someone was to assume the loan do you still need the equity in the home to do that or is there a way to do that without having to go through closing costs and refinancing?

I work for a loan modification company "National Modification Alliance." We are working on modifying a loan that is current. The key is that this individual has a real "hardship." Without getting into the specifics of the case, the lender is looking into it and I’m confident we will be able to get this individual’s loan modified. At least for now, lenders are willing to work with professionals and make changes rather that gaining another foreclosure.
There seems to be a lot of loan modification companies springing up, probably with a lot of scams. I think borrowers should make sure they have a real money back guarantee, with the use of an escrow account so they can’t take the money and run. They should make sure that their loan modification company uses real lawyers to negotiate with their lender. Or, they can just do it themselves. As long as the borrower can prove that their mortgage has real violations or they have a reasonable "hardship," they should be able to negotiate with their lender. There are several companies offer a forensic audit to determine if a mortgage contains any errors or violations.

If you really want to work with a reputable company, look them up on the internet. Google the company name and see what comes up. Look them up with the Better Business Bureau and also websites like ripoffreport.com and scam.com. Ask them how many modifications they have closed. Also ask them how many modifications they normally close with your lender monthly. Attempting to modify your own mortgage is like going on trial for murder and representing yourself. Colin Ferguson tried it out, look where that got him: in prison. Would you really want to risk losing the most important asset you will ever own? Or would you rather have an attorney backed firm with an established relationship with your bank handle the negotiations for you? A company that offers a 100% money back guarantee is showing you they stand behind their product 100%. I challenge any other firm out there to show me the results that I can show you. You don’t have enough paper in your fax machine for me to show you all of our results. I can show you 100s of rates at 3%. I can show you 100s of principal reductions. Has your company been interviewed by NBC? How about CBS? How about ABC? Bloomberg? NY Times? Good Morning America? Any of these? No? We have been covered by all of them. I showed you mine, now you show me yours. What is the company I represent? Amerimod. Do your own research. You decide who is going to do the right thing for you and your family.
Contact: SavedYourHouse@gmail.com

Posted by member1912840 on 02/01/2009 10:46 PM
QUOTE
If you say not to take advice from random posts, then do you have any suggestions on what companies to use that have been successful. We also tried refinancing, but our value-what we owe puts us upside down and our only possibility is an FHA loan, but it still requires 2% equity in the home to refinance. If someone was to assume the loan do you still need the equity in the home to do that or is there a way to do that without having to go through closing costs and refinancing?
END QUOTE
____________________________________

PART 1...
There are many reputable companies out there doing loan mods, mine is one of them.

The key is to do your homework and speak to them at length about what they do, what their fees and guarantees are.

I would not choose to do business with anyone in this industry who chosses to collect the entire fee upfront with a guarantee to give some back later.

Depending upon which state you live in the upfront collection of fees for loan modification could be illegal.

There are more than a dozen states that are regulated at this time (where you must either be licensed or an attorney to do modifications and/or collect upfront fees)
WA, OR, CA, NV, CO, IL, IA, IN, MD, NJ, FL, NC just to mention a few.

In NY it is illegal to collect up front fees for loan modification, and the "escrowing" of these fees has been deemed by the NYS Banking Dept. to be tantamount to collecting the fee upfront.

In NJ you must be an attorney or a licensed Debt Adjuster to perform this service for a fee.

In Washington state you must be a licensed/registered loan originator or an attorney to do loan modifications for profit.

In California you must be DRE approved to collect and upfront fee.

This is not an all inclusive list, just a sample of some of the guidelines out there. Please review the laws in your state before hiring a loan modification company.

PART 2...
Assumption of an FHA-insured mortgage is a servicing function where the responsibility of the mortgage is acquired by another person through either Simple or Creditworthiness process. Individuals may assume mortgages originated prior to December 1, 1986, by utilizing the "Simple Assumption" process. For those mortgages originated on December 1, 1986 and thereafter, HUD placed certain restrictions on the assumption of those FHA-insured mortgages and those mortgages have to go through the Creditworthiness Assumption process.

Check this link for the guidelines and contact info for HUD & FHA:

http://www.hud.gov/offices/hsg/sfh/nsc/faqassum.cfm


___________________________________________________________________

Suffice it to say there are alot of scam artist out there collecting upfront fees and doing nothing. If you choose to hire a loan modification company you can track their progress by contacting your lender on a regular basis and going over your account activity log. Every lender keeps detailed records regarding contact and the contant of that contact.

If your loan mod company tells you not to call your lender, clarify what they mean...
DO NOT GIVE INFORMATION to the lender during your calls, REMEMBER they are debt collectors looking to trick you into giving them information they can use against you.

The only purpose for your calls to your lender would be to keep your loan modification company honest.



Dan Harris
www.LoanModBook.com
www.HomeRetentionGroup.com

Yes, you are correct Dan Harris. It is illegal for Modification Companies to collect up front fees in many states. However, it is not illegal for a Law Firm that specializes in Loss Mitigation focusing primarily on Loan Modification to collect a fee up front. I don't know of any attorneys that offer a 100% money back guarantee along with their representation other than us.

Hi All ! !
I just want to add a couple of comments, about a couple of months ago I was also behind on my mortgage and I started getting all these advertisements in my email about modifying my mortgage, so I started doing some research, I called around to see what these loan modification companies were all about, after talking to 5 different companies, 2 were trying to run a scam on me and the other 2 did not care about my situation, and the only thing they cared about was their FEE ! #$% #$%^ .!!!
I almost gave up until I found this lady name Callie Thompson online and she was very respectable and actually cared about my situation , she told me the truth , I did not feel she was being deceiving and so to make a long story short after about 2 months my payments were caught up and my ARM is now a FIXED and life has turned around for me so I hope this helps some one. Here is her email
keepyourproperty911@gmail.com

Tony

Hi

I just wanted to share my story and hopefully it will help someone.

My husband lost his job and we fell 5 months behind on our mortgage payment. I was so positive that we had lost our home that i began to pack our belongings. Then a very good friend of mine at my work told me about this company that help her save her home. The company is called 21st Century Legal Services, I told my husband that night when I got home. So the next morning we called 21st century Legal Services and much to my shock they saved our home. They modified our monthly payment to a very affordable rate that I could afford. I highly recommend 21st Century Legal Services to anyone in danger of losing their home. 21st Century Legal Services saved my home I know they can save yours.

-Beth B.

sites offer "Do-It-Yourself Kits" that only provide you with copies of forms and paperwork. This is useless unless you have someone with the experience to help you complete these forms. US Home Assistance will provide with all the necessary documents and will actually assist you in completing the forms. We will walk you thru every document that you will be required to complete and will be there to review any documents that you receive from your lender and answer any questions that you may have on them.

A loan modification is a time consuming process that requires constant follow up. We will send you timely alerts on when you should be reaching out to your lender to follow up on your status and to keep the process moving. This will take out the guess work on when you need to call your lender and what to expect next. We will prepare you for what information your lender will require from you on every call and how to answer the questions that your lender will have for you properly. Each phone call you make can affect your outcome and that is why it is so important to always be prepared and know what to say.

For more information please visit my <a href="http://www.ushomeassistance.com">Loan Modification Guide</a> at ushomeassistance.com

Nice read, however, it takes roughly 30-90 days to get the loan modified.

LoanModLawyer
www.loanmodlawyer.wordpress.com
5 steps to getting a loan modification

I hope you can help.

I am a first time homebuyer and I have been in my home for 2 years. I am new at the real estate game, but it seemed like a better idea to own than to pay someone else' mortgage. My loan is a 2 yr fixed 30 year ARM, and the payments have been going up. All together my mortgage with HOA comes to more than 1/3 of my income. I am pending unemployment notice, because the company I work for is moving another 1.5 hrs. from where I live. I am told that my job will likely move with it, but that would equal a 2.5 hour commute each way.

The problem is that I can afford my mortgage right now, but my household could not if I am not working. To top everything off, a duplicate floor plan in my complex has been on the market for about 6 months and just sold for 1/2 of the price of what I financed mine for. My husband and I are considering walking away from the loan, because our investment is more like a ball and chain now.

I have been proactive and trying to prepare, since the job market in my area is so bad, but I don't know what to do. I have made two telephone calls to my mortgage company and I am not receiving a response. What I am now looking at are what the repercussions would be if I did walk away (I have never refinanced), or how to negotiate a lower mortgage principal and better interest rate if I stay. On the flip side, should I walk away and move closer to where my job may be going.

I would appreciate any serious advice.

You have provided valuable information on your article. You asked one question, if someone is not behind on their mortgage payment can they modify or has any one heard of this type of modification?
I am assisting a family member at no cost. We were able to obtain a 3 month extension. In fact, they were allowing up to 5 months. The lender is Wachovia. I have written 2 publications which include information about these types of borrowers. There are several factors to take into consideration if your mortgage payment is on time and you are attempting to modify. First, if your property value is upside down there is no way on earth that you can refinance. This is a strong compensating factor in attempting to modify if the payment is on time. I would utilize this arguement as a negotiating tool. Second, if the real estate taxes or maintenance payments are behind and the city, county, or homeowner's association has a lis pendens or a possible foreclosure threat to the homeowner this can be an additional arguement. You may have a case where the borrower has made their payments on time, but in places such as Florida where the Association Fees are up to the roof the borrower may not be able to come up with $5,000, $15,000, or $20,000 because of a special assessment. The lenders may pay this off and attempt to modify. I hope this information is valuable to the readers on the Trump Blog. Feel free to obtain my FREE report: 10 Tips to Negotiating Your Loan Modification at: http://www.drloanmod.us - I don't provide loan modification services. I was in the mortgage industry for over 10 years, hold numerous professional licenses in the industry and attended numerous universities including Harvard Business School. Also, the information which I am providing is not to be taken as legal advice. Please consult an attorney if you have any legal questions. Thank You.

Dan:

Thank you for all the helpful tips that you have given. I am hoping that you will be able to help me. I am self employed and Like most people these days my husband and I struggling with the bills and quite frankly just to survive. Our finances are really tight and we are unable to pay to get help from a loan mod company. Would you please help me if you can to answer these questions?

1. Some one told me that lenders will look at my business account to get my net income as well as my profit and loss statement, but what if the deposits in my bank account are much less than what I have on my profit and loss statement?

2. What if we have a towing company and and a construction company. The towing company is one year old and the construction company has only only been formed this year. I don't have a business account for the construction business, but I can put together a profit and loss statement. Will the bank even accept the income information from my construction company?

3. Also we have a rental property, for which we have been trying to get tenants for months. The problem is that with our limited income and with 2 mortgages in our budget, we would run a deficit over $1,000. When submitting the load mod docs for the rental, should leave the mortgage of my primary residence off my financial worksheet to the lender and explain to them them that we are trying to negotiate a load mod on my primary residence? Doing this would improve my deficit?

4. Also is it true that the lenders want to see you in the positive on the financial worksheet, even if by little as $100?

I apologize for the long post Dan, but would really appreciate it if you could help us. We are trying to do this all by ourselves, and quite frankly it is a little over whelming,

Thanks

i would like to explain what happen with me trying to do my loan mod.....i paid 1.5% for my loan mod to rescorp. inc they offer to do my loan mod ...they told me to be late in my mortgage payment cause me more problems with my credit than i paid all my $6,000.00 and past almost 7 months and nothing happen they closed and i loose all my money than i hire financiallink services here in nevada they charge me $2,000.00 and date today nothing happen my investor not approve my loan mod and now he doesn't wants to refund my money and his adv. he say 100% satisfactory or many back or warranty money back if we not do it you loan mod ....so now i want to know what place i have to go to get my money back from this companies please people do not trust no body attorneys charge to much this companies too....and we loose a lot of money....best thing to do call your lender directly they want to help all clients and you don't have to pay nothing.....now i am trying to do by my self and i am get it results wiht my lender after 13 months behind......they don't want more houses....no more foreclosure so take your time and work with your lender directly. please do not pay in fron to no body doesn't matter it is attorney's companies DO NOT TRUST please ....do not take offer for the lender too....it is hard but you save your house .....i love my house here in vegas i paid 543,000 now price value is only 180,000 but i don't want to move maybe my lender done my loan mod soon i let my people know., thanks

Hi...
A plan designed with their best interest in mind. If you are lucky you will barely be able to survive, if you aren't you'll be back in trouble again in the future. The fact that loan modifications are re-defaulting at a rate of 58 percent is no coincidence.

Thanks.....

brett,
can i get a loan modification if my loan is privately held and not a Fannie Mae or Freddie Mac loan?

if this is possible would you suggest having a co borrower that is not currently on the loan and lives in another state, but is willing to sign?

thank you for your time.

"1. Some one told me that lenders will look at my business account to get my net income as well as my profit and loss statement, but what if the deposits in my bank account are much less than what I have on my profit and loss statement?"

<strong>A P&L is an accounting of your business's income and expenses. Cash not deposited in your account could be the reason for differences in reveues from P&L to bank statements.
The truth is I have had few lenders ask for business bank statements for a loan modification. Rather it is common for them to caompare your P&L net to your personal bank statements to assure that you are getting the income you claim on your P&L. Whoever suggested that the lender would ask for business bank statements is probably closer to the mortgage broker side of things.</ strong>

2. What if we have a towing company and and a construction company. The towing company is one year old and the construction company has only only been formed this year. I don't have a business account for the construction business, but I can put together a profit and loss statement. Will the bank even accept the income information from my construction company?

<strong>My experience is that they will accept your P&L's and check your income against your personal bank account deposits.</ strong>

3. Also we have a rental property, for which we have been trying to get tenants for months. The problem is that with our limited income and with 2 mortgages in our budget, we would run a deficit over $1,000. When submitting the load mod docs for the rental, should leave the mortgage of my primary residence off my financial worksheet to the lender and explain to them them that we are trying to negotiate a load mod on my primary residence? Doing this would improve my deficit?

<strong>I would prepare a P&L related to the investment property and include the deficit in my income numbers. Don't make the mistake of not disclosing the mortgage. Your lender most likely will pull credit and ask about the mortgage anyway.</ strong>

4. Also is it true that the lenders want to see you in the positive on the financial worksheet, even if by little as $100?

<strong> That depends on a number of variables; If you are working on a HAMP mod the only things that will matter are the GROSS income and equity. If you are working with a lender/servicer who is not putting you through HAMP then it will depend on the investor guidelines for your particular loan. You can ask your lender/servicer what their guidelines are for your loan. It should not be a secret. If the person you are speaking to can't give you the information move up the food chain until someone there can. Also, submit a written request for the indentity of the investor in your loan, some lenders will give you this info by telephone but many need a written request.</ strong>

I apologize for the long post Dan, but would really appreciate it if you could help us. We are trying to do this all by ourselves, and quite frankly it is a little over whelming,"

No Problem I hope my answers have helped.

Dan Harris
www.LoanModBook.com
http://activerain.com/blogs/loanmodexpert
www.HomeRetentionGroup.com

Has your bank pulled this one on you?

"We did receive your request but the hardship letter (or any other document...)
was missing so the modification was denied"?

Don't tolerate the incompetence, ask for a supervisor immediately, escalate up the food chain until you find inteligent life.

Insist that the documents were all sent together and it's not your fault that their incompetent employees lose documents as a regular part of doing business.

If you are getting no where find your lenders name here and ask for contact info:

http://loanmodman.com/forum/index.php

We will put you in touch with the right people at your lender this is a not-for-profit assistance forum.

Hi, Has anyone ever heard of a mortgage company (in my case, Wells Fargo), agreeing to a loan modification on the renter?

Here's my situation:
I recently divorced and am living in the family home. As part of our divorce, I want to purchase this house, but have fallen behind in payments due to now living on only one income.
The mortgage is in my ex-husband's name. The deed is in both our names.
I am listed by Wells Fargo as someone who can speak to them about the mortgage. (I was helping out my ex-husband due to language barriers.)
Wells Fargo told me that since I am renting or living in the home, I can qualify for a loan modification.

I don't want to get tied into a loan modification if it's going to affect my credit or tie me up so that I can never purchase this house or another house once my financial situation turns around.

Has anyone heard of a loan modification being done for the renter and if so, what are the pros/cons?
Thanks...lisa