Posted on: 30th Aug, 2011 12:53 am
We are planning to modify our loan as my wife lost her job and now we can’t afford to pay the loan the way we used to do before. We are on a 30 yr fixed and have recently gone late. Any recommendations as to how it should be done will help. My friend told me that I should be in default in order to get it approved. Is that true? What do lenders mainly look for when they approve modification? Any help is appreciated.
Hi Keir,
Your friend is true when he/she says that you should be delinquent in your mortgage payments in order to get approved for a loan modification. However, strategically defaulting on your mortgage payments won't be a good option as your lender will be checking your financial situation before approving the modification. If he finds that you strategically defaulted on the loan, then he won't be considering your request.
You will have to convince your lender about your financial hardship. This will be the best way to get your loan modification approved.
Take care.
Your friend is true when he/she says that you should be delinquent in your mortgage payments in order to get approved for a loan modification. However, strategically defaulting on your mortgage payments won't be a good option as your lender will be checking your financial situation before approving the modification. If he finds that you strategically defaulted on the loan, then he won't be considering your request.
You will have to convince your lender about your financial hardship. This will be the best way to get your loan modification approved.
Take care.
Loan mods are an absolute joke, its all over the press that the loan mods from the banks are worthless, as they approve no one, and companies that say they can help with loan mods will only take your money. If you lender does not respond to your request, try something else. Rent the home, and have another pay the majority of the house payment. Even if you had to cover a portion, someone else will be paying off the home, and your outlay will be small. You can short sell the home, which the lender would be more likely to approve, or you can do a deed in lieu, where you give back the keys for the loan to be forgiven. Just google the words loan mod and see what garbage comes up...If you do decide to stop paying, make sure you save each payment, as you will be forced into foreclosure after 3 missed payments, and you would then have to cure the default amount owed. Good Luck!
I think modification can be of assistance in some cases, though I agree with Chris' assertion that "companies that say they can help" will only take money from borrowers. There are too many scam artists out there, and not enough attention is being paid to the legitimate HUD-approved agencies who can steer someone in the right direction.
I do believe that a thoughtful lender who structures a modification correctly can be a big help to a struggling borrower. Unfortunately, thoughtful lenders are a rare breed, and most of the modifications being offered to people are a joke...a bad joke.
I do believe that a thoughtful lender who structures a modification correctly can be a big help to a struggling borrower. Unfortunately, thoughtful lenders are a rare breed, and most of the modifications being offered to people are a joke...a bad joke.
