Mortgage Loan Modifications – Banks are not blind to the fact that many of their borrowers are presently suffering financial crisis. It is inevitable that many homes are facing foreclosure brought about by the economic downturn of 2009, which led to borrowers defaulting on their mortgages.
If you have been delinquent in your monthly payments maybe because your income cannot cover your debt bills, but you are now capable of paying monthly, you may be eligible for a loan modification program.
In this case, the payments you have not made in the past months will be put at the end of your loan. However, it might take a little bit longer to pay the total debt off since your monthly payments will stay the same.
On the other hand, if you can now afford to pay extra monthly to make the term of the loan shorter, then you might want to consider negotiating for a repayment plan. If you can prove that you have been defaulting on your payments because of financial difficulties but you now can afford to pay more monthly to make up for the late payments, your creditors will surely be willing to work on your request.
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It is not true that creditors want their properties to be foreclosed. More so now that it is very difficult to sell a house immediately. The properties that have foreclosed are selling at less than half the price of the original market value. In fact, be aware that the less equity you have left in your home, the less money the bank will make in the event of a foreclosure. So in this case, the less equity you have is more advantageous in your part.
But yet again, the process is still not that easy. It is a sad fact that most creditors are not equipped with great personal service. In one credit company, expect different answers from different employees to your questions. You will be transferred from one department to another. And if you do it through phone, you will be put on hold majority of the time.
What would speed up the process is to be prepared with proof of your monthly income after taxes and a summary of your monthly living expenses. And if asked why you have been defaulting on your payments in the past, make sure to give them a plausible answer.
After the initial meeting or phone call with your creditor, you will be given a list of the requirements and documents that have to be submitted. Documents such as writing a hardship letter, 2 months of your most recent monthly income statement, and a copy of your present bank account.
Once your documents have been submitted, inform them of the submission to make sure they got them. Don’t stop there. Be persistent in making follow up calls to make certain that they are indeed working on your request. This specially holds true if your foreclosure date is closing in. If you feel that the person assigned to you is not doing enough, go to a higher authority in the company. They will be more willing to work on your application if they are convinced that there is a chance of avoiding foreclosure to your home and saving your loan. See, saving your home from foreclosure and getting you to pay back the loan means more ROI on their part. Although it may sound self-serving, they actually still are on your side.
Prioritize a plan to get approved for some form of mortgage loan modifications. This would be your best chance of saving your home from foreclosure.