A Loan modification is a process that allows homeowners and lenders to change the terms of a loan in order to help the borrower stay in their home or stop foreclosure. A loan modification is NOT a new loan. It is the renegotiation - or loan restructuring - of an existing mortgage note. For homeowners behind on their mortgage or with an exploding ARM, negative equity or experiencing a financial hardship, a loan modification is often the only option available because the borrowers are unable to get approved for a mortgage refinance or a short-refinance.

A loan modification can be done in several ways or combination of ways listed below:

• The loan's interest rate may be decreased
• The interest rate could be changed from an adjustable to a fixed rate
• The period of time the borrower has to pay the loan back can be lengthened
• The type of loan could be changed altogether
• The amount owed on the loan is decreased

Many borrowers are facing foreclosure because their interest only or variable rate loan interest terms have sky rocketed beyond what they could have imagined. A loan restructuring is an agreeable way for both the lender and the borrower to avoid the cost and hassle of the foreclosure process and legal proceedings.

A loan modification agreement is different from a forbearance agreement. A forbearance agreement provides short- term relief for borrowers who have temporary financial problems, while a loan modification agreement is a long-term solution for borrowers who will never be able to repay an existing loan.

If you have any questions at all about the loan modification process we are here to help you in any way we can! We have specialist here for your needs Monday-Friday from 9am to 7pm Arizona Time.

What is Needed to Accomplish a Loan Modification?

Document Checklist

To ensure a successful loan modification you will need to provide your attorney with your full closing package from the mortgage or title company that you did business with to obtain you current loan(s). All of the following should have been included within your closing package.

**Although this list looks long, if you have the closing package all in one piece it is very likely everything needed is in that package.

Documents Required to Perform Federal and State High Cost Loan Test, Federal TILA Test, State Regulations Test, and State Restricted Fees Test

• Initial Estimated and Certified HUD-1 or 1A
• Estimated Closing Statement
• Final Truth-in-Lending Disclosure and Itemization of Amount Financed
• Note; with Endorsements, Modifications, Attachments, Riders, Addendums

*If more than one loan be sure to include copies of all notes

• Payment Rider (if applicable)
• Buy down Agreement (if applicable)
• Mortgage Insurance Certificate (if applicable)
• Section 32 Disclosures (if any)

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Documents Required to Perform Federal RESPA Test

• Early Good Faith Estimate prepared by lender
• Initial Truth-in-Lending Disclosure prepared by lender
• Initial Loan Application (FNMA 1003) or Uniform Residential Loan Application

California Per Diem Interest Test (If your home is in California)

• Disclosure Concerning the Charging of Per Diem Interest on a California Mortgage

Rescission Test (For Refinances Only)

• Notice of Right to Cancel

Escrow/Impound Account Test

• Escrow Waiver
• Escrow/Impound Account Agreement

First Payment Date Test

• First Payment Notice to Borrower
• Hardship Letter for first payment due less than 30 days after closing of escrow

Review of Authorized Credit Report

• Borrowers Authorization
• Credit Report (ordered by broker)

Additional Loan Documents that will Improve Accuracy for the Modification Process

• Second Lien Documents with subordination Agreements (if applicable)
• Sales Contract with Addendums
• State Disclosures
• ARM Disclosures (if applicable)
• Two months most recent paycheck stubs (for each client on the mortgage)
• Most recent W-2’s
• Most recent Tax Returns with all returns
• Two Months Consecutive Bank Statements (most recent)
• Mortgage Coupon Statement

Thank you for your time. We will be working diligently to improve the quality of your life through this loan modification.

Please call us at 866-948-6323 top get started or if you have any questions 

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Do It Yourself Loan Modification?

Is it Possible?

In short yes it is possible to successfully modify your home loan. However, many find that it takes far more time than they have to invest and often times the individual trying to modify the loan by themselves does not get the best deal and in fact often ends up in a forbearance agreement or in an even more expensive home loan. Remember the lenders Loss Mitigation Department exists to limit the banks losses and maximize the banks profit, not yours. If you are ready to take on this challenge read ahead for a step by step process on how to do it yourself.

Introduction

The term loan modification has been somewhat unfamiliar to homeowners everywhere. However, it has recently been brought to light through the media. What most people are coming to realize is that losing their property to foreclosure is becoming a reality. Homeowners are feeling the crunch of higher interest rates and a slowing economy. A loan modification may be the only way for a homeowner to save the biggest investment of their life, their home. Negotiating with the bank for a modification on your home loan can be an overwhelming process. These circumstances are why hiring a professional and experienced Loan Modification Company is of extreme importance. The right Loan Modification Company will give you the best chances of rescuing you from your high monthly payments, and your home from foreclosure.

The reality of today's market is one of steep drops in real estate values nationwide coupled with tighter credit requirements. The combinations of these two realities make a formidable opponent for someone facing an upcoming adjustment in their mortgage payment. Let’s not forget that unfriendly world traveler called inflation that has decided to sit on our front stoop for some time now. This formidable opponent is not one you have to fight by yourself. We can be there "in the ring" for you. We can help save your home regardless of the situation. The sad truth is that millions of people are in the same boat. Homeowners are struggling to make their mortgage payments and live their lives in a comfortable fashion. The last thing we want  to see homeowners lose their property when we are here and available to create a solution to this nationwide problem.

The first thought most homeowners have is to refinance. Under normal circumstances refinancing would be the correct answer. However, in today's market this formula is not effective as a result of the drop in real estate values and the tightening' of credit markets. Because of today’s economy, homeowners cannot typically recreate their past refinancing deal. We will work to alter the terms of your mortgage, which will provide a workable solution that is agreeable between you and your lender. When the loan is successfully modified it typically creates a win-win situation for all parties involved, including the bank.

Most homeowners are currently aware that banks are willing to do loan modifications - that’s why you are reading this documentation.

Who are we to be advising you? We are a full service company for anyone in need of financial help. We provide debt settlement services, credit repair, and home loan solutions. On top of being able to help our clients get back to financial stability, we are backed by a staff of mortgage professionals, debt settlement experts, and a staff of attorney’s that can force lenders into a corner and hold legal ramifications over their heads, so that they cooperate with our requests. So, now that you have some insight about us, let's get back to our subject at hand and learn why this is a great time to take advantage of a Loan Modification.

By now you have probably heard about the first government bailout plan that was supposed to use $700 billion of the taxpayer's money to help the banks free up capital and start lending again. After $350 billion of the taxpayer's funds were spent it had little to no affect on the economy. The remaining funds allocated from the first bailout plan were thrown out by our new President, Barack Obama, who in turn developed a new plan. This new plan calls for a $787 billion economic stimulus plan with $75 billion of the funds earmarked to help homeowners create some relief on their mortgages. Will this work? Who knows? However, if you plan on waiting around for the government to help you, you should rethink your options. To review the scary facts of who qualifies for help you can review financialstability.gov for specific details. You will find that the families and individuals that are truly in need have no chance of qualifying under the government guidelines.

What is a Loan Modification?

A loan modification is a process where a lender re-evaluates a loan in the event that the homeowner (also called the borrower) cannot continue paying the full amount of the original mortgage payment. In many cases lenders may waive late fees, lower interest rates to as low as 1.5%, adjust the length or term of the loan, and sometimes even reduce the principal balance to assist the homeowner. Why? Lenders modify mortgages when they have too many foreclosures on their books, and it's a smart business decision for them to do so. The lender would typically prefer to take less each month and have someone living in the property rather than foreclose on it.

Additionally, lenders often agree to do loan modifications, because foreclosures are time consuming, expensive, and problematic. A foreclosure often takes months to finalize and during that time the vacant house might be vandalized, the real estate market might decline further, and the lender may lose even more money. So, the main reason that lenders modify loans is to avoid foreclosure problems. Obviously, if very little is owed on the loan and the house can be sold for a profit the lender might prefer to foreclose and sell the house.

Doing a Loan Modification is not rocket science. A lender will usually quickly determine if the file is doable or not worth doing at all. If the owner can show that he or she currently has not been able to make the payment due to a temporary setback, but he or she is still employed, and their finances are in order, they have a good chance of receiving a loan modification. For example, a loan modification file most likely will not be approved if the lender does not feel the owner needs assistance or if the owner has too many expenses and no proof of income. Remember, you do not have to be behind on your mortgage to qualify for a loan modification. It is also important to have realistic expectations.

What is involved in doing a Loan Modification?

Though a loan modification may sound complicated, it's not. It is however, VERY time consuming. We normally see this process take anywhere between 90 to 120 hours to complete the necessary work and documentation for each loan modification we perform. It also requires a LOT of patience. If you plan on orchestrating a loan modification yourself be prepared for the numerous financial forms required to complete this process. A loan modification is kind of like qualifying for a home loan in reverse. Although there is a lot of paperwork involved, the most time-consuming part of a loan modification is the follow up. The first step is simply calling the bank and asking for the Loss Mitigation Department. In contacting the Loss Mitigation Department one must request that a loan modification package be mailed, emailed, or faxed to the negotiator.

Loan Modification Industry Myths:

• You have to be late on your mortgage to get a loan modification
• Getting a loan modification will hurt your credit
• You have to be a licensed mortgage broker to do a loan modification
• If you are in foreclosure it is too late to get a loan modification

An attorney has to be involved in a loan modification

How Much Do Loan Modification Consultants Charge?

• Many attorneys charge a fee of $1,000 to $2,500 per month (or more) until the loan modification is completed. They also rarely provide any guarantees of an outcome. A loan modification typically takes between 60 to 120 days.
• Many non-attorney based loan modification companies charge between $2,000 and $4,000 for a loan modification.
• Many attorney backed loan modification companies charge between $2,500 and $8,000 for a loan modification.
• We typically have seen that the attorney backed loan modification companies are the most effective as they use the best of business negotiations and legal negotiations to get to the best possible outcome for their clients.

We charge no upfront fees for the initial pre-qualification. After a client goes through our approval process a fee to start the loan modification services will be requested. The only possible additional fee would be for a prepared loan modification audit. However, it is rare that this would be requested from a lender. Although our Refund Guarantee is excellent it is not the best part of the services we offer. We retain attorneys to process and handle your loan modification for you. Our attorneys are in contact with their assigned clients on a regular basis to keep them up to date with the process and let them know what they are doing to hold their lender over a legal barrel and force the modification.

In Summary, here are some of the key benefits of modification:

Some of the client benefits may include:

1. Lowering your interest rate
2. Extend the term of the loan. Some lenders will give you a 40 or 50 year mortgage to help lower your payments
3. Saves the borrower’s credit
4. Saves the borrower’s home from foreclosure
5. A simpler process than foreclosure or refinancing
6. A lot less expensive than refinancing or moving
 

Some of the lender benefits may include:

1. They will still have the borrower making mortgage payments and therefore will still be profiting
2. Cuts back on the costs involved with a foreclosure
3. Fewer delinquencies or mortgage defaults on their books
 

Benefits of professional loan modification help vs. attempting to do it on your own:
 

1. You have one chance to do it right. Therefore, having a professional take care of it will save time and money
2. The experts have the negotiating skills and know what types of questions will be asked by your lender and they know how these questions should be answered
3. The experts can expedite the loan modification based on their knowledge and expertise dealing with loan modifications every day
4. We know your legal rights when it comes to your mortgage
 

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The Loan Modification Process

The 7 Steps to Getting a Loan Modification Approved are:
 

• Step 1: Loan Modification Package
• Step 2: Gather Documentation
• Step 3: DOC CURE (loan audit)
• Step 4: Submit Package
• Step 5: Negotiate
• Step 6: Modify new terms and conditions of mortgage
• Step 7: Finalize and review doc’s and then sign the new agreement

Let's review each one of these steps in detail.

Step 1: Contacting the lender to ask for a Loan Modification Package

The negotiator will first contact the Loss Mitigation Department. A loan modification package will be requested and the file will begin to be processed. When the package is received the necessary information and documentation will be applied.

A typical loan modification package includes the following information requests:

• Contact information
• Property information including estimated value
• Current monthly income
• Additional income (not wages) such as social security, child support, welfare, etc.
• Estimated value of all assets
  • Home
  • Other real estate
  • Checking accounts
  • Savings
  • IRAs
  • 401 (k) accounts
  • Stocks, bonds, and CDs
  • Autos, Boats, RVs. etc.
  • Other Investments
• Liabilities (monthly payments and balance owed)
  • Alimony - Child support
  • Dependent care, child care, and/or tuition
  • Cable, cell phone, internet…
  • Other mortgage(s) and/or rent
  • Personal loan(s) / credit cards
  • Medical expenses
  • HOA fees, taxes, insurance…
  • Automobiles
  • Tax Liens
  • Utilities
  • Auto expenses (gas, maintenance…)

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Step 2: Gathering Documentation

Be Prepared, there is a lot of documentation that will be requested from you!

Here’s what you will need to do. Gather all your income and expenses for the last two years. You will need to include paystubs, income tax returns, bank statements, property tax bills, etc. Find all the mortgage paperwork and add these documents to the file. Pull together all bills, either paid or not from the times you were falling behind on the house payments until now. Include utilities, auto payments, credit cards, student loans, child support, and medical bills in this package. Find the winter and summer heating and cooling bills and include these. You need to also include everything in the documents describing why you fell behind. Show as much proof as possible such as receiving an employer’s notification of reduced hours or a layoff, an invoice for an auto repair or a furnace replacement, or a shutoff notice from a utility company.

Prepare a Hardship Letter to Accompany your Documentation

A good loan modification hardship letter shows valid reasons someone would need a modification. For example your hardship letter should include being laid off, being hospitalized, being unable to work, having mortgage loan adjustment, or if you were deceived into a loan (loan fraud) etc. When putting together your hardship letter, be sure to point out everything you can. It's OK to cry out so someone hears you. Just be brief and to the point, but don’t leave anything out. And, of course be honest.

Hardship Letter Example...

To Whom It May Concern:
I have had problems making my monthly payments due to financial difficulties created by my negative amortization loan and my high interest rate. I was sold this loan by a loan officer who assured me the quoted payment of $2,142.88 was my full principal and interest payment. Needless to say he was totally wrong and I feel that he misled me. I was only paying a deferred interest payment, which was going to increase my loan balance each month. I have been paying my interest only payment and been struggling due to the high rate of 7.75%. My wife and I are barely making ends meet and we have been dipping into our savings to cover our mortgage payment along with the taxes and insurance. My wife and I were told we could refinance out of this loan, but that is obviously not possible since the home is worth less than we owe on our mortgage, and the property values keep on dropping in our area. In order to avoid a future possible foreclosure, I'm requesting a lower interest rate (30 year fixed rate with lower monthly payment) on my current mortgage with Bank of America.

As a long time customer, I'd prefer that you remain my primary mortgage lender, but without a reduction in the interest rate I simply can't afford higher monthly mortgage payments.

Our (my wife and my) total annual income amounts to $81,000.00. That income should certainly be sufficient just to pay a reasonable principal and interest monthly payment. We have always paid our bills on time and have an excellent credit rating, but cannot afford to pay the minimum payment and have the loan recast. We need help badly and want to retire in this home. We are scared of our current loan and we were completely misled and had no idea about the negative effects of paying the minimum payment. Please help us.

Thank you for your consideration,

Your Signature

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Step 3- DOC CURE (Loan Audit)

In this step of the process our professionals will look deeply into your loan documentation to find violations and errors. These errors can result in large fines that the bank will have to pay to their regulating organization. When errors are found, they can be used to force a cure notice. In forcing a cure notice the bank will be forced to comply with a modification in a specific time window. It is important to realize that forcing a CURE Notice is much easy to do when it is provided through an attorney and has the threat of legal action behind it. In utilizing this strategy the bank will take your modification request more seriously.

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Step 4 – Submission of the Loan Modification Package to your Lender

The lender will typically advise someone requesting a modification to fax it into them and follow up in 5 to 8 business days to verify they received it. Unfortunately, this method does not hold the bank accountable. On your behalf we will submit your request by certified mail to ensure it is received. After the package has been signed for we will begin following up with the lender every 5 business days and get the first and last name of EVERYONE we speak with.

Key Tip: Try to keep your emotions out of this!!

The threat of losing your home can be very scary for most of us and often is a very emotional and personal thing. We all know life throws curve balls at us from time to time. It’s the nature of the game and you'd better expect it, because it's coming in one form or another. The crazy thing about going into foreclosure is that many times you can actually come out of it better off than you went in. One way to do this is through a mortgage modification.
 

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Step 5- Negotiations with the Mortgage Company

Key Tip: A mortgage company employee's job is to minimize their loss and get as much money out of you as possible. Remember this. This is exactly why it is important to hire a professional.

Here are some key steps:

Getting the Game Face On
Before we even pick up the phone and call the lender on your behalf we make a game plan on precisely how we are going to approach them. Remember, loss mitigators are trained to mitigate loss... for the lender not for you. They are ready for negotiation calls, so it is important to have the right representative in your corner. Each time we call we will be strategic and approach all conversations very carefully. Everything that is said will be documented on their side to try and use that information against your case. Don’t worry; we keep our own conversation logs to ensure nothing can be used against your modification case. This is critical because we will be speaking to many different people in the loss mitigation department.

Getting the Ducks in a Row
The most crucial and the most challenging aspect to winning a loan modification negotiation is having a full understanding of the client’s budget. Be honest when you are filling out the necessary paperwork. A complete and accurate financial picture will give your negotiator the best chance of maximizing you chances for success.

At the completion of your first contact with the Loss Mitigation Department a file will be prepared and the process will begin. The outcome will vary depending on each individual's situation, the current market conditions, and the lender's current policies and directives. Some examples of what could result would be:

• Payment deferral
• Payment modification
• Loan terms modification
• Forbearance
• And denial of the modification request

Still not sure about conducting this process yourself?
If so, let’s review how we can assist you.
Our strategists take our negotiations to a higher level by leveraging our attorney’s ability to audit all of the documents you received pertaining to the current mortgage. Our legal team reviews the original loan documents to uncover violations such as predatory lending or disclosure violations. You would be AMAZED by all of the violations we find in almost EVERY set of loan documents we review. These violations cause question to the loan(s), which we use as leverage to force a Cure Notice. It is the threat of legal action that allows us to force the Cure Notice. When our attorneys contact a lender they are typically connected directly to decision makers within the bank's legal department. We have created PHENOMENAL results for our clients by leveraging our business negotiation skills with the legal violations we find in the loan documents. We are very confident that we can achieve faster and better results for a loan modification through our processes and experience.

Feel free to contact us for a FREE consultation at 1-866-948-6323
 

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Step 6 - The Lender Has Made You a Deal, What Now?

Respond to your lender, but don't be rushed into making a promise that you can't keep. Before making a deal with your lender, be sure to describe your situation to an attorney, accountant, or a reputable loan modification expert. You need to make sure that it is reasonable and not an agreement that will stop foreclosure for just a month or two.

Many lenders are likely to offer forbearance. This is only good for a short term band aid and will not help to create a long term solution. Most commonly this entails adding a set amount to each month's payment. A forbearance plan can go as long as 36 months and cost more than what the homeowner is currently paying. Many are destined to fail and are completely unreasonable for borrowers to pay back. Usually, forbearance will require placing the delinquent amount on top of your monthly mortgage payment. If you had trouble making your mortgage payment before, good luck paying your new larger more unaffordable payment.

If after speaking to your lender you are told that a modification is not an option and you are advised that you may need to sell your home to dispose of the worthless debt and then move on, don’t jump to any conclusions this most likely is not the case. If you were told something of this nature, call us at 1-866-948-6323 and ask to learn more about "short selling" your home or to find out if a modification can be completed through legal action provided by our attorneys.

Don't give up the fight to stop foreclosure and save your home! If all efforts fail, it's not the end of the world. Just make sure that you mitigate loss to yourself and do your best to save what little credit you have left.

A Loan Modification can change your existing mortgage note and give you a fresh new start in managing your home. Your account may be brought up to date immediately. You will no longer have the lender calling, asking you to pay fees and charges that you simply cannot afford.

We are available to assist you at any step in your journey to get you back on track. Our mission is to help home owners avoid as many foreclosures as we possibly can and welcome your questions as you proceed.

Call for a no obligation consultation and receive professional and caring services: 1-866 –948-6323 or fill in our Contact form.
 

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Step 7: Finalize the Loan Modification Paperwork

When you receive your final package from the lender, make sure to:

• Review it VERY carefully
• Follow all of the lender instructions
• Finalize the deal!

Now that you have learned the ins and outs of Loan Modifications, you need to make the critical decision on whether or not to do it yourself or to hire a professional organization to represent you. Here are some key benefits of professional loan modification help vs. attempting to do it on your own:

• An individual's emotions and frustrations can be very unproductive in obtaining a loan modification
• You have one chance to do it right. Therefore having a professional take care of it will save time and money
• There is approximately 90 to 120 hours worth of work to complete a loan modification - much of this is spent on the phone while on hold
• A competent loan modification professional can typically find between 5 to 32 state and/or federal violations in most loan documents that can be used as leverage to negotiate a better modification by an attorney
• If you are already in Foreclosure - each step is critical to make sure that you do not lose your home. In this case call a professional quickly
• The experts have the negotiating skills and know what will be asked by the lender and how to answer those questions
• The experts can expedite the loan modification based on their knowledge and expertise
• Frustration is taken away from the borrower when they hire a professional to handle this delicate and frustrating situation for them.