For anybody who has a mortgage, understanding how home loan modification programs work nowadays could be important. That’s because the economy, being in the shape it is, is forcing many more people to look at modifying their mortgages than was the case in the past. Fortunately, there are a number of programs, both governmental and private (from lenders), for doing so nowadays.

There’s a mistaken assumption among many people that they won’t be able to qualify for a loan modification from their lender, but that’s generally not the case nowadays. This is because the federal government has stepped in and started up a special modification program aimed at helping people stay in their homes, paying mortgages that have been modified such that they reduce the monthly payment.

The first thing to realize about any sort of modification is that it’s basically asking the lender to rewrite the terms of the home loan. It has to be done such that a lower monthly payment results or there’s no use in applying for it, to tell the truth. At its heart, the lender will be agreeing to write down at least a portion of the home loan in order to ensure a lower payment, in other words.

It’s the case that most lenders wouldn’t normally be amenable to such an action but, with economic circumstances being the way they are, more are coming on board every day. They all understand that it’s better to get at least a little of a home loan than to get nothing at all if it goes into foreclosure, in other words. And, with the government now involved, lenders are a bit more at ease in doing so.

Many lenders have also set up their own private modification programs, which should come as welcome news. If a person holding a mortgage doesn’t qualify for the government version, he might be able to qualify for a private lender version. It might not have as generous a term setup as the government program, but it should still result in a lower payment nonetheless.

It’s always much smarter to contact a lender about a modification at the beginning, when financial hardship first begins to rear its ugly head, than at the end when the loan is so far gone and into default that there’s almost nothing that can be done about it other than foreclosure. Taking care of the issue at the beginning might also result in more favorable new terms than waiting, for what it’s worth.

It should also be understood that no small amount of paperwork is normally involved when it comes to applying for a modification. Even the government will require a hardship letter — in which one lays out why one can’t make the current monthly payment — as well as proof of income sufficient to make the new payment, if the loan is modified.

Because the economy has caused many people to enter into financial hardship to one degree or another there are several home loan modification programs now in existence. Just remember that, to qualify for any of them, there will need to be enough income to show that payment ability exists. As well, contacting a lender well ahead of time may also help.

Need street-smart tips on getting Mortgage Modification? Visit Rockwood’s site about DIY Loan Modification at Home Loan Modification

Millions of American homeowners had tons of savings, boatloads of equity in real estate and a great high-paying job before the recession and nothing has changed (except their home equity has slipped a bit). This message is for them – congratulations.

Another millions of other American homeowners had not reached such financial heights before the housing market meltdown. Some of them are young, just getting started on wealth-building. Others are less fortunate or not as well-connected. Some are in the midst of personal calamity like a divorce, death in the family or are really sick themselves. Others are working in causes that distract them from wealth-building…things like church, the environment, helping the homeless, AA, etc. And, some just have vocational priorities like teaching or preaching or other fields that don’t pay well.

And, finally, another millions of other American homeowners participated in a horrendous and shameful scam that foolishly, greedily and sometimes fraudulently enabled them to borrow too much money from the banks who borrowed too much from Wall Street who borrowed too much from the world…oh, my!These characters not only used that money to purchase dwellings near and even in “good” neighborhoods way above their class but they had the audacity to actually move their families into them! Wow! Everyone seems to agree that these guys can be dealt with by foreclosure.

There are heroes and villains, struggling with foreclosure, in each group. In my work as a foreclosure consultant I get on the phone and across the table from hundreds of struggling homeowners each month. ‘The vast majority in three groups are heroes – Americans just trying to extend our heritage of restlessness and hope for a better life for our families.

I bristle when I hear the industry pundits pander to smug viewers by attacking the members of the financial lower class. Certainly there are as many housing crisis villains in the wealthy upper-class as in the struggling lower-class.

So, lighten-up on snootiness. Let’s clean-up the mess but be fair. The blame game should be blind to socio-economic class. Because the blame’s all around.

Want street-smart tips on foreclosure help and ways to get Mortgage Modification? Visit Rockwood’s site about DIY Loan Modification at Home Loan Modification

Last year, we spent tons of time with clients to figure if they qualified for a mortgage modification. In 2010 it takes us about 10 minutes and is nearly perfectly accurate. It’s because the banks have become so very standardized and predictable.

Standardized – The Making Homes Affordable Program (MHA) Guidelines have become the standards. Other programs are modeled after the MHA. None of the other programs are as rich and all are harder to get. But the guidelines have become universal.

I say predictable because the sheer numbers of applications has forced the banks to routinize everything – including erroneous rejections – to a point where it is pretty obvious to us veteran loan mod freaks.

You’ll get a mod if 1) you have a typical hardship (income down, expenses upduh!), 2) your loan qualifies (non-jumbo, made before 1/1/09), your ratios are right, 3) you live in the home, and you are in default. That’s not to say that landlords have no hope they just have less likelihood of approval and should have lowered expectations.

Don’t mistake qualifying with getting approved! Thousands of qualified applicants get rejected every day! Being qualified is just the beginning of the journey. You have to know how to navigate this bureaucratic, convoluted, administriviated maze (don’t bother to right-click – I made up that word!). You can’t do that with advice crafted for the masses – advice you get from the banks themselves or from the government. You need to get advice from a source that has actually succeeded in getting throught he maze – time and again.

You should have the advantage of an insider, a street-smart advisor who has been at the game table for a long time. Someone who is unabashadly on your side – not a government entity and certainly not a bank employee or site. If you follow the advice of the government or bank sponsored entities you can only expect to get info tailored for the masses. That’s like going into a street-fight with training in only boxing. You are totally unprepared when the opponant kicks you in the ear! You’ll have to pay for such advice. But, you get what you pay for.

Interested in street-smart tips on Mortgage Modification? Visit Rockwood’s site about DIY Loan Modification at Home Loan Modification

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It’s just part and parcel of the mortgage modification process in 2010 – REJECTION! Lenders can’t deliver performance levels that satisfies anyone in spite of over two years of work and over eighteen months of financial incentives from the President’s Making Homes Affordable Modification Program (HAMP). Even well qualified applicants are getting rejected. Sometimes, more than once.

But, I have come to think that rejection is a very good sign! A review of my files over the past 6 months shows that not one single mortgage modification was granted without a prior rejection. That’s right, every one of the modifications I have completed for clients in 2010 has been rejected before being accepted. Even the ones that began with the encouraging Trial Modification resulted in a rejection of the Permanent Mod before final acceptance. Some of the mortgage modifications I have successfully managed were rejected as many as three times before we achieved the modification. Whew!

The application process alone is daunting. Then, weeks of follow-up is required to keep the application on-track. Now, in addition, homeowners must also become expert at overcoming the rejection objections that lenders throw in their way. That means being able to tactifully escalate problems to supervisors, managers, directors, VPs, and CEOs. That means being able to mobilize local congresspeople, regulatory agencies and even the press! It’s a challenge!

But, hey, quit with the whining! That is the way it is – so cope! You will get rejected for one of about two dozen common reasons. Sometimes I think they are posted as a type of “cheat sheet” on the computer monitors of new Loss Mitigation Agents. Things like “Your loan investor does not participate in modification programs”, “Failed the NPV calculation”, “Income too high”, “Your income is too low”, “You have too many assets”, “Your 4506-T has expired”, “Your Ratios are wrong”, “You did not provide updated docs”, “We need a note from your mommy (O.K., I made this one up!)”, and etc., etc., etc.

All of the reasons above can be valid. Sometimes they are. But, all too often, they are simply erroneous, and are the result of the lender having mismanaged the file or simply untrue statements that slow or end the application process if the borrower does not object. So, when you get rejected, press on. At least you’re not being ignored! Immediately demand (nicely!) an explanation of exactly why you were rejected. Go through several agents and escalate to a supervisor if you must to get the answer. Then, deal with it. Supply the missing document or sign the updated form or correct the data entry error on your income (No, it’s not $85,000 per month. It’s $850!) or do whatever it takes to get them back on track. You can request reconsideration when you submit the information or correction to the agent.If you have submitted a good and accurate application upfront, you will eventually be accepted and get the relief that the mortgage modification programs were intended to provide.

Take heart. What is worse than rejection is the months of total disregard and that most of us get in the mortgage modification process. It’s not likely to change anytime soon. Mortgage modifications will continue to be a great way to throttle the foreclosure rate and they are a great way for homeowners to get some relief. It’s just taking a lot more perseverance and nerve than it should!

Need help with your ownMortgage Modification? Visit Rockwood’s site about DIY Loan Modification at Home Loan Modification

Sometimes waiting in line is smart. Like, for instance in the security line at the airport. However, if you are waiting in line for a loan modification, you’re nuts. In the line ahead of you are hundreds of thousands of frustrated homeowners just like you. Instead, you’ve got to get “Out-of-Line” and up to the front of the line. That’s right. Take cuts!

In the current Loan Modification Frenzy, the “line” is too long. Hundreds of thousands are in the queue ahead of you with more than 50,000 added per week. The banks can’t staff and train and manage and retain nearly enough workers and the systems and procedures are overwhelmed as well. Add to that the fact that the banks are only begrudgingly cooperating with the effort – and you have a formula for frustration and failure.

The front 4% of the line are getting good modifications. So, copy the winners, How do they do it? They get out-of-line and do extraordinary things. Previously I have described ways winners craft their applications and follow-up on the application to use what I call File Inertia. Let me now describe the way they escalate problems.

The broken process for evaluating loan modifications always produces problems. Erroneous rejections, incorrect assessments, unnecessary and redundant information, etc. I advise my clients to: 1. Ask 5 Times, 2. Escalate Well and 3. Escalate Well Beyond.

1. Ask 5 Times The common problems are easy. For instance, if they misplaced your 4506-T Form, send them another one. If they request 3 months of bank statements instead of the usual 2send ‘em in. But, when you get information from the agent that is just wrong, and you can’t seem to get them to perceive it…That’s when you should Ask 5 Times. Call back and try another agent, 5 times. That’s right, it’s not worth it to try to prove your point and sometimes the agent is just not trained well enough to ever understand your question or concern. If you burn through 5 agents and can’t get the “right” answer, then ESCALATE.

Escalate means going up the chain of commandasking a manager or supervisor to review the situation with you. I do this politely so as to minimize the offense to the agent but also confidently and pointedly. I will say (to the 5th agent) “Please connect me to the supervisor on duty, will you? This is just too important to me to let this go. I want to hear it from a supervisor”. Sometimes the agent will oblige. Sometimes the agent will argue with you. Sometimes (I believe) the agent will ask their cubicle-mate to pose as a manager. Sometimes the manager will have to call you back (lots of luck with this one). And sometimes a more informed, better trained person WILL actually take your call and add insight and solve the problem.

Escalate Well Beyond means taking your problem beyond the Loss Mitigation Department to seek assistance and support from other departments, or from bank executives, regulatory agencies, politicians, trade associations and even the press. Don’t think that your situation is too small for any of these entities to care about or to take action on. The secret to getting their support is to request it in a manner that indicates that you 1) have used all the correct channels already, 2) understand their role and have appropriate expectations for what they can do on your behalf, 3) know exactly what you want them to do and by when and 4) that you are the sort of person who will escalate right past them if they do not respond.

Escalations Well Beyond the Loss Mitigation Department are surprisingly effective. Several of my clients have had success getting CEOs, Congressmen and even a U.S. Senator to place a call on their behalf. Such intervention is almost always successful.

We’re all in this together (well, many of us are at least). And getting help is often just a case of knowing who to ask and what to ask for. Most people are genuinely sympathetic to those of us caught in the housing crisis. After all, it’s nearly most of us.

Rockwood, dubbed the “Loan Mod Mercenary”, has helped thousands get great loan mods despite the odds. ? Visit Rockwood’s site about DIY Loan Modification at Home Loan Modification

I have been working in avoiding foreclosures and short sales for over three years now. In the early days of this crisis, I would spend a lot of time describing the definition of a short sale to Realtors and home owners! These days, most know the basics of short sales and I talk with them about the details and benefits of going this route.

I am a Realtor and Investor. I work with people all over the US helping them to find a way out of tough situations with their real estate. Most people I talk to have issues with less income coming in and/or their mortgage payments going up. On top of that most of the time their real estate is worth a lot less than what they owe.

Here are some solutions: Most people start talking with their bank to get a mortgage modification. This can be good, but often the reduction in monthly payment is not enough to make a difference. The banks often deny the modification because of too little income.

The second thing people may want to look into is a legal defense from the pending foreclosure action. This has been successful in delaying the foreclosure for months or even years!

Usually, even going through these actions, it will come down to a foreclosure or a short sale. Usually the short sale is much better for the home owner than a foreclosure. The credit is hurt much less and the debt to the bank can often be dismissed!

There are a lot of people who are in what I can the “standard” position. This is someone who has lost their job and/or have lower income and their home has lost a LOT of value and the mortgage payment has gone up. Often, people want to try to get a mortgage modification in order to continue paying lower payments and stay in their home. I totally agree with this as a first tactic to use. BUT, the end result is usually too little a decrease in payments and they end up right where they started.

If these don’t work as expected, a short sale can be used. Negotiations can occur with the lender and a short sale is approval to sell it at current market value. The owner can often find another housing arraignment at a much lower price. The amount owed to the bank after the sale can be dismissed along with the tax liabilities! This can be the best solution for owner! Foreclosure and bankruptcy can leave the home owner with debt and liabilities that they were not expecting! There are many lawyers that can help you with your questions.

Want to find out more about short sales, then visit Daniel Wolkoff’s site on how to choose the best way to avoid foreclosure for your needs.

A mortgage loan modification is an agreement between the lender and homeowner that allows the mortgage terms to be modified. The idea is that this will help you to be able to make your payments and keep your home in order to avoid foreclosure.

First and foremost, always remember that the loss mitigation worker is working against you. His employer is the bank, and the bank has trained him to try to get you to agree to pay as much as possible. That is why it ‘loss mitigation, ‘ not ‘mortgage assistance.’ Loss mitigation is the bank’s attempt to limit the amount of their losses. They will not give up a cent that they don’t think they have to.

The next thing you need to do is get all of your financial information together. You will need to be able to prove your income and expenses. That means you have to have all of your recent pay stubs and bills, and maybe some that are not so recent. You will also need tax records for the past two to three years. Be prepared to prove any unusual expenses that contributed to you falling behind on your mortgage.

When you are working with a lender to get a modification, you must keep records of everything that is said, as well as any correspondence sent or received. Some banks are notorious for saying they didn’t receive something when they did or trying to change the terms that were agreed to. Get a recording device for your phone and use it. Keep anything you get from the lender in the mail and keep copies of anything you send to the lender.

Don’t spend your mortgage payments. Just because you are not paying the payment on the house right now doesn’t mean it’s all right to use the money to pay other debts or worse, to blow on things you don’t need. Your lender will expect you to have some money to pay them as soon as you come to an agreement. Save the money so that you are ready when the time comes.

Most important of all, don’t make an agreement that doesn’t work for you. The bank will often make you an offer that actually increases your payment amount for a period of time to get you current, and then goes back to the normal payment amount. Unless you have gotten a raise since you started having trouble making ends meet, this is obviously not going to work. Keep at it until you get something that will work for you, and be prepared to walk away if no agreement can be made. Foreclosure is not the end of the world, and you may even find yourself better off if you can get yourself into a cheaper home with management rent or payments.

For assistance with loan modification contact a qualified loan modification attorney that will look out for you and your family’s best interest such as Janian and Associates.

categories: loan modification,mortgage modification,loss mitigation,home loan modification,loan modification attorney