Does Anyone Ever Get A Loan Modification?
How do you file or submit a Loan Modification in Arizona? Didn’t the federal government create a home loan modification program or loan modification guidelines to help struggling homeowners stay out of foreclosure? After all, we did bail the banks out so they could survive and avoid bankruptcy, why won’t they help you?
These are all too familiar questions for homeowners who have tried themselves to get a Loan Modification done. The bank has asked you to send in documentation (several times), and the loan officer has indicated that you appear to qualify and are still under review for a modification. Then you receive a Notice of Default in the mail and find that you are now in foreclosure and could lose your home. What happened to the loan modification you were “under review” for?
Do you feel double crossed? Do you feel frustrated and confused?
When a Loan Modification Isn’t Enough
All too often homeowners find themselves in a worse position, often facing foreclosure still, after attempting to work with their lender or servicer to avoid foreclosure. Loan modifications can be an effective tool to assist homeowners with avoiding foreclosure, which in most cases is the ultimate goal. In certain instances, homeowners are left with no alternative to saving their homes except filing a strategic bankruptcy or initiating foreclosure defense maneuvers. Start Fresh Arizona uses its team of dedicated experts to get results for homeowners. We offer a real and honest way of getting loan modification help. Get your loan modification case reviewed now, take action.
Loan Modification Basics
What is a loan modification? The terms “loan modification” and “mortgage modification” were rarely used as part of the lender or servicer lexicon prior to 2007. However, since 2008, when our economy began the tailspin it remains in today, home loan modification has been widely publicized as the preeminent solution to the ongoing mortgage crisis. Politicians, lenders, and the media heralded new government loan modification programs and assured the public that “help was on the way” for millions of struggling homeowners. Unfortunately, due to hastily drafted legislation and poor implementation by both the public and private institutions involved, the mortgage loan modification process has become marred in controversy and is widely believed to be a failure.
Loan Modification scams and so called “mod-shop” firms are preying upon desperate home owners looking for help. Do your research. Ask a lot of questions. Don’t get sucked into a scam that requires you to spend thousands of dollars up-front, with no promise of getting your modification complete and processed.
If you have already applied for a loan modification, you have probably experienced a painful process wherein false hopes and “pre-approvals” turned into months of endless phone calls, faxes, and requests for missing documents. This is what our clients report to us, and Start Fresh Arizona has witnessed it firsthand. Here are several basic things you should know about home loan modifications:
- Whether you qualify or not, most lenders/servicers will encourage you to apply, even if you are getting further behind on payments. Again, there are profit motives involved due to the compensation structure established for most lenders/servicers. If this is happening to you, you should seek legal counsel immediately.
- As is the case with your current mortgage, a mortgage loan modification agreement is a legal document; it can be drafted in a way that protects the lender and exposes you, the borrower, to risk. Unfortunately, many homeowners have learned the hard way that the lenders/servicers are neither looking out for their best interests nor necessarily acting in ‘Good Faith’ during the loan modification process.
- Traditional mortgage loan modification programs are all designed to do one thing: Reduce your first lien mortgage payment (including your taxes, homeowner insurance, and HOA fees) to 31% of your GROSS (pre-tax) monthly income. If your payment (including escrows) is already below the 31% target payment amount, you may not qualify. There are exceptions, but to be certain, we will check into this for you early on in the evaluation process.
- Even for those who qualify, most lenders/servicers will find any reason to deny your application for loan modification and proceed with foreclosure—particularly if they know that you are representing yourself.
- A home loan modification may get you out of trouble temporarily, but it is no panacea if you are facing other burdensome debt; consequently, you may still be at risk of losing your home. Generally, the experts at Start Fresh Arizona find at least three major areas of debt and payment relief for our clients. If you are seeking a loan modification, Start Fresh Arizona advises all clients to explore all areas of debt relief simultaneously, so that your new mortgage payment will be affordable to you over the long term under almost any circumstances.
- Most important, you must be certain of whether you are eligible for a mortgage loan modification. In most cases, Arizona Loan Rescue experts can determine eligibility during the initial telephone consultation. Remember, your lender/servicer may tell you that you are “pre-approved “without any intention of offering you permanent help.
Take action now to get the information you need to determine whether loan modification is a viable option for you. If you are not eligible for a loan modification, Fresh Start Arizona will explore all other possibilities to ease your financial hardship.