Loan Modification Questions and Answers
It is important to get educated about your rights and the amount of time you have remaining. You then must understand your options and decide how you are going to prevent the foreclosure. Once you have done that it is important to take immediate action. The sooner you take action the better chance you have of avoiding the foreclosure.
If you are having problems making your monthly payment on your mortgage, then your house may be placed into Foreclosure. A Foreclosure is the legal way the bank can use to repossess your home. The foreclosure process can be a very stressful and confusing time for most homeowners. Unfortunately many predators are aware of this and use this duress to take advantage of uneducated homeowners. We at HouseHoldRelief.org do not believe a lack of education is any reason why anyone should lose their home. Below are 8 steps to assist you make sound decisions and avoid foreclosure.
How long does a Loan Modification take?
The process typically takes anywhere from 60-180 days. There is no exact length of time that can be given because there are a lot of different variables that can effect the process. The only way to ensure that the Loan Modification Process goes as quickly is possible is to prepare a legible, well organized and complete package to the Lender.
How many times can I apply for a Loan Modification?
There is no limit to the number of times that you can apply for a Loan Modification. As circumstances change, you may be eligible for a Loan Modification in the future, even if you were already declined.
The Home Affordable Refinance Program gives up to 4 to 5 million homeowners with loans owned or guaranteed by Fannie Mae or Freddie Mac an opportunity to refinance into more affordable monthly payments. The Home Affordable Modification Program commits $75 billion to keep up to 3 to 4 million Americans in their homes by preventing avoidable foreclosures. For more information please visit www.makinghomeaffordable.gov.
Can I apply for a Loan Modification if I am in foreclosure?
Yes you are still able to apply and receive a Loan modification even if you are in the foreclosure process. In fact the banks are even more motivated to workout some type of solution because they do want to foreclose on your home. Because the situation is a little more distressed, make sure to get through to a negotiator and request a postponement or a stay on the foreclosure sale until the Loan Modification application has been reviewed. They will not do this automatically just because you send in an application, so be sure to speak to someone and confirm the information.
How do I determine the equity in my home?
The market value of real property minus the total amount of all the mortgages and existing liens. Liens include but are not limited to; Property Taxes, Personal Liens, Tax Liens, etc.
What is a Hardship Letter?
A letter written by the owner of the house to the bank detailing the financial hardship and details leading to the hardship. It is required when requesting a short pay or Loan Modification from the bank.
What is the Loss Mitigation Department?
A department of the mortgage bank that is responsible for recovering funds from a delinquent or defaulted account. They are in charge of mitigating the loss that may result from the defaulted loan.
What is a Notice of Default?
A document that is recorded and delivered to the borrower when default has occurred under a deed of trust. This initiates the foreclosure process, and the information is now public knowledge.
What if my bank says they do not do Loan Modifications?
This is just not true. Many homeowners are running into this problem. Many of the homeowners that call into their bank are talking to customer service representatives that have no authority or connection to the decision makers in the bank. The Loss Mitigation Departments of almost all banks are responsible for approving Loan modifications. In fact many banks are being encouraged to adopt the HAMP program that was enacted by the Department of Treasury in March of 2009.
The goal of the OBAMA LOAN MODIFICATION is to help 7-9 million borrowers stay in their homes. The Federal government will offer incentives to lenders who participate, but the final determination is up to each bank. Homeowners will be asked to gather certain required documents and complete loan modification forms that will be reviewed for eligibility.
Here are some general guidelines for basic eligibility for this program:
You must live in the home as your primary residence
Includes second mortgages
You must be able to prove your income
Your current house payment must equal 31% or more of your gross monthly income
You do not have to be delinquent to apply for this loan modification program
No charge to apply-Free loan modification program
Your loan must have been taken out prior to January 1, 2009
Loan amount is less than $729,750
Facing a financial hardship situation