Frequently Asked Questions

 

What is a "Modification?"

A modification is an adjustment to the terms of your existing mortgage. Your lender can modify your loan by doing one or a combination of the following: reducing the interest rate and amount of your payment, extending the term (length) of the loan, changing the length of the new payment to a specific term (such as fifteen, thirty, or forty years), or a combination of these options.

What is a "short sale"

A short sale is occurs when you sell your home for less than what is owed. Listing your home for short sale can keep the bank from foreclosing for a period of time, but once the home is sold, you must move out. This is not the best option for most people. If you want to stay in your home, modification is usually the best option.

What is "forbearance"?

Some client will be eligible for forbearance. This gives you time to gather your assets. In a forbearance plan, the lender will delay or reduce your payments for a short period of time with the understanding at the end of the plan you will choose another option to bring your account to a current status. The lender will cease all legal action for this time period.

What is a "hardship"?

A hardship is defined as an event that has made it more difficult to pay your bills. This could be anything from unemployment, decrease in income, divorce, separation, medical bills, too much debt, death of spouse, payment increase, military service, incarceration, illness, or even having a child.

What is a "risk of imminent default"?

Risk of imminent default means the home owner has experienced one or more of these hardships, his payments are no longer affordable and if nothing is done to help the situation the home owner will not be able to continue to make his payments.

Do I have to be behind of payments?

No. Your lender will consider a modification based on your hardship. If you are having difficulty making your payment whether you are 12 months late or not late at all, you might qualify for a loan modification.

How long does this process take?

Every file is different. Depending on the lender and the circumstances, it could be as short as one month up to six months. The average time frame is right around three months.

Why choose modification instead of refinance?

Today's financial marketplace is completely different than it was three years ago. Home values were continuing to rise, lenders would allow you to state your income with no proof, and there was money to be given out by practically every bank. Today home values are still falling, lenders do not have the credit that was readily available, and underwriting guidelines are tighter than ever. Loans today are based on credit score, proof of income, loan to value: the amount owed compared to the value of the property (usually 80%), and debit to income ratio (usually 40-50%). If these are not perfect, it becomes nearly impossible to get a new loan. Modification allows you to "refinance" without having to apply for a new loan. There are no closing costs, no appraisal, and the rates are usually better than if you could refinance. The cost is significantly less and provides more benefits.

Will a modification hurt my credit?

No. Neither the process it self or a completed modification will affect your credit adversely, however, if you have already been late on payment your credit has already been affected. The good news is once a modification has been completed, you can start rebuilding your credit with affordable on time payments.

What if I have more than one mortgage?

This is common. 90% of all homeowners have two or more mortgages. We work with all your lenders to negotiate a new affordable payment. In some cases we can even combine the mortgages into one new low affordable payment.

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