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How to Get a Mortgage Loan Modification, mortgage loan modification.#Mortgage #loan #modification


How to Get a Mortgage Loan Modification

If you are a struggling homeowner trying to avoid foreclosure, a loan modification that lowers your monthly mortgage payment might be the perfect solution for your situation. Even though the process might seem intimidating, you can apply for and obtain a loan modification on your own without paying for assistance. Read on to learn more about how loan modifications work, how to apply for a modification, and how you can navigate the process on your own.

Loss mitigation in the mortgage business is a process where borrowers and their lender work together to prevent foreclosure. There are several different kinds of loss mitigation, such as:

(To get information about these and other options to avoid foreclosure, see our Alternatives to Foreclosure area.)

Perhaps the most sought-after form of loss mitigation is a loan modification.

Understanding Loan Modifications

A loan modification is a written agreement between the borrower and the lender that permanently changes the original terms of the promissory note to make the mortgage payments more affordable. To reduce the monthly payment amount, the lender typically agrees to lower the interest rate and extend the term of the loan. The lender also normally adds any past-due amounts to the unpaid principal balance as part of the modification.

(Generally, lenders do not like to approve first-mortgage principal reductions as part of a loan modification. However, there are some programs under the Hardest Hit Fund that combine principal reduction assistance with loan modifications. The Keep Your Home California program does this. For more information on the different Hardest Hit programs, visit our Hardest Hit Fund topic page.)

Different Loan Modification Programs

Depending on your situation and circumstances, there are several different loan modification programs you may qualify for, including:

  • The Fannie Mae and Freddie Mac Flex Loan Modification program.
  • A proprietary (in-house) loan modification.

Loan Modification Problems During the Mortgage Crisis

During the mortgage crisis of the late 2000s, mortgage servicers commonly committed egregious servicing errors such as failing to handle loss mitigation applications appropriately. (A mortgage servicer is the company that collects monthly mortgage payments, tracks account balances, manages the escrow account, handles loss mitigation applications, and pursues foreclosure in the case of defaulted loans.)

Borrowers seeking loan modifications during this time almost always got the runaround from their mortgage servicer. It was next to impossible to talk to the same person more than once, paperwork got lost, and, worst of all, the servicer would keep the foreclosure moving forward while at the same time letting the borrower think that a loan modification was forthcoming (called dual tracking).

Laws That Help Homeowners in the Loan Modification Process

As a result of the problems during the mortgage crisis, new rules and laws designed to protect homeowners in the loan modification process came about. For example:

  • On January 10, 2014, new mortgage servicing rules designed to protect borrowers when it comes to mortgage loans and loss mitigation went into effect. Read more about New Federal Rules Protecting Homeowners With Mortgages.
  • California passed the Homeowner Bill of Rights, which regulates how mortgage servicers handle loan modification applications. Nevada and Minnesota also passed similar laws.

Now, servicers generally try to work with customers who are facing financial difficulties to keep them in their home if at all possible. They have increased their personnel and streamlined the process to better keep up with increased loan modification requests. If you want a loan modification, it is easier than ever to navigate the process on your own since the loss mitigation process is much better regulated and structured than it used to be.

Contact Your Servicer s Loss Mitigation Department

If you want a loan modification, the first thing you should do is contact your servicer s loss mitigation department (sometimes called a home retention department). You can typically find contact information on your monthly mortgage statement or on the mortgage servicer s web page.

Single Point of Contact

One of the big problems in the past was that homeowners who called their lender to apply for a loan modification had to explain their circumstances repeatedly, often to several different representatives. Currently, in many instances, you ll be assigned one person to work with you through the process who will explain each step along the way.

On January 10, 2014, new federal mortgage servicing rules went into effect. Among other things, one of the rules requires continuity of contact when a homeowner seeks foreclosure alternatives. Under the continuity of contact rule, the servicer must assign a single person or a team of personnel to help if you inquire about a way to avoid foreclosure. (The continuity of contact rule does not apply to open-end lines of credit, reverse mortgages, qualified lenders under the Farm Credit System, any loan that is secured by a property that is not the borrower s principal residence, and small servicers and certain government agencies.)

Additionally, the Homeowner Bill of Rights in California and Nevada also requires mortgage servicers to appoint a single point of contact (or team) if a homeowner requests a loan modification or other foreclosure prevention alternative. The single point of contact must remain assigned to the account until all loss mitigation options are exhausted or until the account is brought current.

The Loan Modification Application

To obtain a loan modification, you ll need to submit an application to your mortgage servicer. Often you ll need to provide:

  • a completed application (including your personal information, mortgage information, property information, and so forth)
  • recent paystubs (or a profit and loss statement if self-employed)
  • bank statements
  • tax returns
  • income/expense financial worksheet, and
  • a hardship statement or affidavit.

Don’t Hire a Loan Modification Company to Help You

In most cases, you are better off filling out the application and gathering the required documents on your own rather than hiring someone to assist you. Here’s why.

Saves money. It is much cheaper to just do it yourself than paying someone to do the paperwork for you.

Scams abound. The majority of loan modification companies are scams. They will take your money and you ll get very little in return, certainly nothing that you couldn t have done yourself. These companies may tell you they are experts at negotiating a loan modification, but there is no trick to getting a loan modification. There is very little negotiating that occurs in the process. The lender has certain requirements that borrowers must meet in order to get a loan modification, and if you meet them, you will be given a modification.

(To learn about other common foreclosure scams, and how to avoid them, see our Foreclosure Rescue Other Scams topic area.)

Efficiency in responding to inquiries. If you work on the loan modification process yourself, you can respond to any inquiries or requests from the mortgage servicer in a timely manner. Loan modification companies often fail to respond to requests from the loan servicer, which can lead to the loan modification request being denied. Also, you are in the best position to respond to any inquiries because only you know all of the details of your particular situation.

Getting Help

However, if you find that you are having difficulty understanding what you need to do to complete your application or are having problems dealing with your servicer, consider talking to an attorney or a HUD-approved housing counselor


Types of Mortgage Loans and Home Loan Programs, The Truth About, loan modification programs.#Loan #modification #programs


Loan Types and Programs

Loan modification programs

There are an infinite number of loan types out there, and lenders are constantly coming up with creative ways to wrangle in new homeowners. The type of home loan you choose can make or break you as a borrower, so make sure you fully understand it before making any kind of commitment.

These days you ll probably come across ridiculous loan programs that seemingly allow anyone to qualify for a home loan. There are 1% start rate loans, often referred to as neg-ams or pick-a-payment programs, and 40-yr and 50-yr loans that stretch the mortgage payment out over what seems like a lifetime.

Most prospective homeowners these days seem to be interested in 100% financing, generally because they have don t have the assets necessary for a down payment. Unfortunately, the proliferation of these types of home loan programs have increased the number of high-risk borrowers in the United States at an alarming rate.

That may explain the surge in mortgage defaults and foreclosures over the past several years.

But if you take the time to educate yourself on the many home loan types out there, you ll effectively decrease your chances of defaulting on your mortgage. That said, let s talk about the many different loan types and programs available today.

Before getting into specific loan programs, I want to highlight the types of loans available to potential homeowners.

Conforming Loans and Non-Conforming Loans

One way home loans are differentiated is by their GSE eligibility. If the loan meets requirements set forth by Fannie Mae and Freddie Mac, it is considered a conforming loan. If the loan doesn s meet all the underwriting requirements set forth by the pair of GSEs, it is considered non-conforming.

One of the main guidelines that determines whether a mortgage is conforming or not is loan amount. Generally, a mortgage with a loan amount below $417,000 is considered conforming, whereas any loan amount above $417,000 is considered a jumbo loan. However, in Alaska and Hawaii the confirming limit is $625,500.Note that the conforming limit may change annually, and has risen quite a bit in the past few years as housing prices skyrocketed.

A jumbo loan may meet all of Fannie Mae and Freddie Mac’s loan underwriting guidelines, but if the loan amount exceeds the conforming limit, it will be considered non-conforming and carry a higher mortgage rate as a result.

If your loan amount is on the fringe of the conforming limit, sometimes simply dropping your loan amount a few thousand dollars can lower your mortgage rate tremendously, so keep this in mind anytime your loan amount is near the limit.

Conventional Loans and Government Loans

Mortgages are also classified as either conventional loans or government loans. Conventional loans can be conforming or jumbo, but are not insured or guaranteed by the government.

Then there are government loans, such as the widely popular FHA loan. This type of mortgage is backed by the Federal Housing Administration (FHA). Another common government loan is the VA loan, backed by the Department of Veteran Affairs. The max loan amount for these types of loans varies by county. There s even a USDA home loan backed by the same folks that grade steaks!

Now that you know a bit about different home loan types, we can focus on home loan programs. As I mentioned earlier, there are a ton of different loan programs out there, and more seem to surface everyday. Let s start with the most basic of loan programs, the 30-year fixed-rate loan.

The 30-year fixed loan is as simple as they come. Most mortgages are based on a 30-year amortization, and the 30-year fixed is no different.

The 30-year fixed loan is just how it sounds, a loan with a 30-year term that is fixed for 30 years. What this is means is that the loan will take 30 years to pay off, and the rate will stay fixed during those entire 30 years. There isn t much else to it.

Let s say you secure a rate of 6.5% on a 30-year fixed loan with a loan amount of $500,000. You ll have monthly mortgage payments of $3160.34 for a total of 360 months, or 30 years. You will be required to pay the same amount each month until the loan is paid off. So the total amount you would pay on a $500,000 loan at 6.5% over 30 years would be $1,137,722.40.

Total Interest Paid over Life of Loan: $637,722.44

Interest Paid in 2006: $32,335.45

Interest Paid in 2007: $31,961.17

Average Monthly Interest Paid over Life of Loan: $1,771.45

You will also need to pay taxes and insurance on top of this mortgage payment, so keep that in mind when figuring out how much house you can afford.

This sounds steep, but most people don t stay in a 30-year loan for 30 years. They either pay it down quicker by making higher monthly payments (biweekly mortgage payments), or they may sell or refinance the loan.

Another common and simple to understand loan is the 15-year fixed loan. This works exactly like the 30-year loan except the same fixed payment is made in half the time, 180 months or 15 years. Obviously the payment will be much higher, but you will pay less interest and gain more home equity in a shorter amount of time. People who have an ample amount of income usually prefer this type of loan to reduce the overall cost of financing a mortgage.

This is how it breaks down:

Total Interest Paid over Life of Loan: $283,996.63

Interest Paid in 2006: $31,900.36

Interest Paid in 2007: $30,536.41

Average Monthly Interest Paid over Life of Loan: $1,577.76

The monthly payment is significantly higher, but the amount of total interest paid over the life of the loan is much less. Because you re putting more money towards the equity of the home, you paying less interest each month, which you ll see as the $1.577.76 figure as compared to the $1,771.45 you d pay on a 30yr fixed loan. That s nearly $200 a month that you would save in interest charges by electing to take a 15-year fixed mortgage.

Although the monthly payment is markedly higher than the 30 year fixed mortgage, the total interest paid during the 15 year loan is substantially lower. It may seem like the obvious choice, but it s more complicated if you factor in tax deductions and the power of leverage. Not to mention if you can afford a monthly mortgage payment that high.

Learn about other types of mortgage programs including:


Best Jumbo Mortgage Rates: Compare Current 30 Year Super Jumbo Fixed – Adjustable Home Mortgage Refinance Loan Rates in CA – Nationwide, loan modification calculator.#Loan #modification #calculator


Today’s Best Jumbo Home Loan Rates

  • What is a Jumbo Mortgage? – qualification standards how these loans compare against standard conforming mortages
  • Conforming Mortgage Limits – loans above these limits are considered jumbo
  • Jumbo Mortgage Calculator – calculate your monthly loan payments
  • What Drives Mortgage Rates? – understanding how interest rate markets are set
  • The Global Recession – and how it impacted the housing market
  • Rate Normalization – and how it may impact the housing market

Fannie Mae Freddie Mac are government-sponsored enterprises which provide liquidity to the national mortgage market by buying mortgages and keeping them in their portfolios or packaging the residential mortgages into mortgage-backed securities (MBS) sold to secondary investors. They have limits on the size of the residential mortgages they package into securities. Jumbo mortgages are loans which back home purchases where the amount financed exceeds the conforming mortgage loan limit.

Jumbo does not refer to the size of the house, but rather the amount of the loan. Many coastal properties are highly valued even if they are not physically large dwellings.

the distinction between jumbo and super jumbo is also based upon the amount of the loan. Lenders internally determine where they set classifications. In many parts of the country $1,000,000 is the demarcation line, but in wealthy areas the floor for super jumbo might be closer to $1,500,000 or $2,000,000.

Jumbo Rates vs Conforming Mortgage Rates

Jumbo mortgages have higher risk to the lender and lower liquidity in the marketplace. Historically lenders have typically charged higher rates than on conforming mortgages, though as the recovery has continued that gap has shrunk and there have been brief periods where yields on jumbo mortgages were lower than conforming mortgages. Prior to the 2008 recession jumbo loans had a spread of about 0.2% against conforming loans. During the crisis this spread blew out to a peak of about 1.7%, but has since come down to where jumbo mortgages are similarly priced to conforming mortgages.

Jumbo loans can be structured as either fixed or adjustable rate offerings, and yields tend to be similar to the associated conforming options. The most common adjustable rate option is the 5/1 ARM but other options exist including 5/5, 7/1 10/1.

For the first two loan types it means the interest rate would remain the same for the first 5 years of the loan. Then on the first loan the interest rate could reset annually after that, whereas on the second loan interest rates would reset every 5 years. The third and fourth examples would have a set rate for 7 and 10 years respectively and then reset annually. Adjustable-rate mortgages adjust based upon a spread off a reference rate such as LIBOR, up to a pre-determined rate cap in the loan contract.

Borrower Qualification

Lenders create their one underwriting guidelines for jumbo loans. As part of that process, borrowers may have to produce bank statements over the past year along with W2s, and 1099s. Self-employed people may need to show two years of tax returns. Lenders also typically want to see

  • the borrower has a 6 to 12 month cushion in savigs to cover note payments,
  • a FICO credit score of at least 680 to 700, and
  • a debt-to-income ratio below 40% to 45%

A second appraisal of the home may also be required to verify its value.

The additional information needed to qualify a borrower means that closing costs are typicially higher on jumbo mortgages than on conforming loans.

Down Payments

On conforming mortgages about 35% of borrowers put at least 20% down. On jumbo mortgages down payments of 5% or 10% are quite common.

Most jumbo loans do not require PMI payments, however borrowers with a small downpayment may incur additional fees and get charged a higher interest rate. The higher rate of interest is a way lenders can self-insure the loan, charging the equivalent of PMI for those with small down payments. Those who are buying a second home with a jumbo loan will typically be required to show more reserves and have better credit.

Second Mortgage Option

Some borrowers who struggle to secure a jumbo loan may be able to qualify for a conforming loan and use a second piggyback mortgage plus put more cash down to get below the conforming loan limits, which are $424,100 for a single-family home throughout most of the country and $636,150 in designated high-cost areas. Piggyback loans are typically issued for 10% to 15% of the property purchase price and come with a slightly higher rate of interest since the primary mortgage has the first claim on any default. In most cases second mortgages use adjustable rates, but fixed rate options are available at slightly higher rates.

Homeowner’s Insurance

Homes backed by jumbo loans should be fully insured to protect against natural disasters. Most insurance policies do not cover earthquakes or flooding by default, so supplemental policies may be needed.

Income Taxes

In 2017 homeowners are able to deduct from their income interest expenses on up to $1 million dollars of mortgage debt. At a 4.25% interest rate, a homeowner would pay $42,174.13 in interest during the first 12 months. That compares against the following standard deduction amounts.


Refinance, Refinancing Your Mortgage, Quicken Loans, loan modification calculator.#Loan #modification #calculator


Refinance Your Mortgage

How do you want to get started?

With Rocket Mortgage by Quicken Loans, our fast, powerful and completely online way to get a mortgage, you can quickly see how refinancing your home can help you achieve your financial goals.

Answer a few questions, and we’ll have a Home Loan Expert call you.

The Basics

What to Know Before You Refinance Your Home

What does it mean to refinance? Refinancing is the act of taking on a new loan with different terms. Reasons for refinancing your mortgage include lowering your payment, shortening your term or using the equity you’ve built up over time to get cash back out of your home.

What’s Your Goal?

Deciding if it makes sense to refinance your home depends on a number of factors, but it starts with one question: What do you want out of your refinance? Here are some of the main reasons homeowners decide to refinance their mortgage:

Talk to a Home Loan Expert or use our refinance calculator to see if refinancing your home can help you meet your financial goals.

See Today s Mortgage Rates

Want to find out if refinancing is right for you? A good way to start is by looking at the current mortgage rates. Don’t forget – rates change daily based on the market, so if you like what you see, make sure to talk to a Home Loan Expert to get your personalized rate and lock it in as soon as possible.

Try Our Refinance Calculator

Want to see if refinancing makes sense for you? Try our refinance calculator. Here’s how it works.

First, we’ll ask about your primary goal for your new loan. You can choose between lowering your payment and paying off your home sooner. Depending on which option you select, you’ll either be asked what your current monthly payment is or how many years you have left on your loan.

After that, you’ll be asked to estimate what you still owe and how much your home is worth to determine the amount of the loan. Then, you ll input a rough credit estimate and your ZIP code.

The results page will show you a sample rate and payment. You can adjust the rate and type of loan, as well as add taxes and insurance to find out if refinancing your mortgage can help you meet your financial goals.

Calculate your rate now to see if refinancing is right for you.

Frequently Asked Questions

What documents are required to refinance?

The following is a list of documents generally required during the refinance application process:

  • Proof of income: Typically, you’ll need to show original pay stubs for the last 30 days.
  • Copy of homeowners insurance: We ll need to verify that you have current and sufficient coverage on your home.
  • Copies of your W-2 forms: Each loan applicant will need to supply W-2 forms so we can verify past employment and income history.
  • Copies of asset information: This includes statements for accounts that hold money for closing costs, statements for savings, statements for checking and 401(k) accounts, and investment records for mutual funds or stocks.
  • Copy of title insurance: This helps us verify things like taxes, names on the title and the legal description of the property.

Your lender will also need to pull your credit report as a part of the refinance process, so have your Social Security number handy when it’s time to apply.

Check out QLCredit to view your full credit report. Creating an account is free and won’t affect your credit score.

How much does it cost to refinance?

It’s possible to add the costs associated with getting a new mortgage into the total refinance amount to avoid paying anything out of pocket at closing. However, refinancing in order to lower your payment, get cash out or consolidate your debt may result in a longer loan term or a higher rate, and that might mean paying more in interest overall in the long run.

When should I refinance my mortgage?

There’s no definitive guideline as to how long you should wait to refinance after buying a home. The most important thing is to make sure the refinance will help you meet your financial goals. These are some questions to consider when determining whether to refinance:

  • Does your current lender have a prepayment penalty?
  • Do you have enough equity in your home?
  • Are interest rates lower now than they were when you got your current home loan?
  • Do you plan to stay in your home for several more years?

What is equity? Why is it important for refinancing?

Equity is the appraised value of your home minus the amount you still owe on your loan.

The value of equity depends on your goal for refinancing. The more equity you have, the more money you may be able to get from a cash-out refinance. Or, more equity could result in a better interest rate, which may help you lower your monthly payment. Having enough equity may also help you eliminate private mortgage insurance (PMI), a costly monthly fee included in many mortgages with an original down payment of less than 20%. Talk to a Home Loan Expert or use our refinance calculator to see if you have enough equity to reach your financial goals.

Talk to a Home Loan Expert or use our refinance calculator to see if refinancing your home can help you meet your goal.


Ocwen Application, Forms And Packages, Mortgage Assistance, mortgage loan modification.#Mortgage #loan #modification


Ocwen Application, Forms And Packages

Need Help With Your Ocwen Loan Modification?

Need Help With Your Ocwen Short Sale Process?

Avoid Foreclosure. Work With Professionals Who Understand.

Need The Ocwen RMA Package. You ve Come To The Right Place.

Need Help With Your Ocwen Loan Modification? Get More Info Here.

Need Help With Your Ocwen Short Sale? Get More Info Here.

Mortgage loan modification

Ocwen Loan Modification Package, Application and Forms

What is an Ocwen Loan Modification Package?

Ocwen Mortgage requires an Ocwen Loan Modification Package known as the Ocwen Request for Mortgage Assistance (Ocwen RMA). It s important to always use the most up to date paperwork when applying; Always check with a professional. The paperwork we last found was put up on the Absolute Consultant Group(ACG) Website. ACG helps homeowners with their Ocwen Mortgage Loan Modification process.

There are 19 Sections to the standard Ocwen Loan Modification Package and totaling about 20 pages.

Need Assistance With An Ocwen Morgage?

Need Assistance With An Ocwen Morgage?

Request for Mortgage Assistance Programs Package Breakdown:

Hardship Affidavit Application Check List

  1. Section 1 RMA- Statement Of Intent
  2. Section 2 Request for Mortgage Assistance- Borrower Information Form
  3. Section 3 Ocwen Package Property Information Form
    1. Section 3A Loan Modification Package If you do not occupy the property information.
  4. Section 4 Mortgage Package Ocwen Occupancy and Rental Information Form
  5. Section 5 Ocwen Loan Modification Other Properties Owned
  6. Section 6 Ocwen Application Household Assets and Expenses Form
  7. Section 7 Loan Modification Application Ocwen Monthly Income form
  8. Section 8 Ocwen Mortgage Form Income Documentation Required
  9. Section 9 RMA Ocwen com Self Employment Borrower Profit and Loss Form
  10. Section 10 Mortgage Assistance IRS Form 4506t-EZ
  11. Section 11 Ocwen Loan Servicing, LLC Hardship Statement Affidavit
  12. Section 12 Loan Modification Non-Borrower Consent Form
  13. Section 13 Mortgage Assistance Consent For Release of Information Form
    1. Ocwen Third-Party Authorization Form
  14. Section 14 Loan Servicing Borrower Acknowledgement And Agreement
  15. Section 15 MHA Making Homes Affordable Homeowner s Hotline
  16. Section 16 Department of the Treasury Beware of Foreclosure Rescue Scams. Help is Free
  17. Section 17 Ocwen Loan Modification Frequently Asked Questions FAQ
  18. Section 18 Ocwen Mortgage Assistance Information about deed-in-lieu of foreclosure.
  19. Section 19 Ocwen Foreclosure Alternatives Information About Ocwen Short Sales

Understanding Your Ocwen Loan Modification Status

As you can see the Ocwen Loan Modification Package is a lengthy document. Ocwen Mortgage doesn t make it easy but that s why we are here to offer you assistance with your application process to get mortgage assistance with your lender. Ocwen Corporation, out of Palm Beach Florida. outsources a very large part of the process and often that leaves you talking to someone overseas.

Ocwen Assistance In America

Based here in the United States we become your point of contact. No longer will you have to deal with Ocwen s India division. You get someone here in the states to work with you and your Ocwen Mortgage when you work with Absolute Consultant Group for all your Mortgage Assistance needs. We are your one stop shop for completing your Ocwen loan modification process.


How to Get a Mortgage Loan Modification, mortgage loan modification.#Mortgage #loan #modification


How to Get a Mortgage Loan Modification

If you are a struggling homeowner trying to avoid foreclosure, a loan modification that lowers your monthly mortgage payment might be the perfect solution for your situation. Even though the process might seem intimidating, you can apply for and obtain a loan modification on your own without paying for assistance. Read on to learn more about how loan modifications work, how to apply for a modification, and how you can navigate the process on your own.

Loss mitigation in the mortgage business is a process where borrowers and their lender work together to prevent foreclosure. There are several different kinds of loss mitigation, such as:

(To get information about these and other options to avoid foreclosure, see our Alternatives to Foreclosure area.)

Perhaps the most sought-after form of loss mitigation is a loan modification.

Understanding Loan Modifications

A loan modification is a written agreement between the borrower and the lender that permanently changes the original terms of the promissory note to make the mortgage payments more affordable. To reduce the monthly payment amount, the lender typically agrees to lower the interest rate and extend the term of the loan. The lender also normally adds any past-due amounts to the unpaid principal balance as part of the modification.

(Generally, lenders do not like to approve first-mortgage principal reductions as part of a loan modification. However, there are some programs under the Hardest Hit Fund that combine principal reduction assistance with loan modifications. The Keep Your Home California program does this. For more information on the different Hardest Hit programs, visit our Hardest Hit Fund topic page.)

Different Loan Modification Programs

Depending on your situation and circumstances, there are several different loan modification programs you may qualify for, including:

  • The Fannie Mae and Freddie Mac Flex Loan Modification program.
  • A proprietary (in-house) loan modification.

Loan Modification Problems During the Mortgage Crisis

During the mortgage crisis of the late 2000s, mortgage servicers commonly committed egregious servicing errors such as failing to handle loss mitigation applications appropriately. (A mortgage servicer is the company that collects monthly mortgage payments, tracks account balances, manages the escrow account, handles loss mitigation applications, and pursues foreclosure in the case of defaulted loans.)

Borrowers seeking loan modifications during this time almost always got the runaround from their mortgage servicer. It was next to impossible to talk to the same person more than once, paperwork got lost, and, worst of all, the servicer would keep the foreclosure moving forward while at the same time letting the borrower think that a loan modification was forthcoming (called dual tracking).

Laws That Help Homeowners in the Loan Modification Process

As a result of the problems during the mortgage crisis, new rules and laws designed to protect homeowners in the loan modification process came about. For example:

  • On January 10, 2014, new mortgage servicing rules designed to protect borrowers when it comes to mortgage loans and loss mitigation went into effect. Read more about New Federal Rules Protecting Homeowners With Mortgages.
  • California passed the Homeowner Bill of Rights, which regulates how mortgage servicers handle loan modification applications. Nevada and Minnesota also passed similar laws.

Now, servicers generally try to work with customers who are facing financial difficulties to keep them in their home if at all possible. They have increased their personnel and streamlined the process to better keep up with increased loan modification requests. If you want a loan modification, it is easier than ever to navigate the process on your own since the loss mitigation process is much better regulated and structured than it used to be.

Contact Your Servicer s Loss Mitigation Department

If you want a loan modification, the first thing you should do is contact your servicer s loss mitigation department (sometimes called a home retention department). You can typically find contact information on your monthly mortgage statement or on the mortgage servicer s web page.

Single Point of Contact

One of the big problems in the past was that homeowners who called their lender to apply for a loan modification had to explain their circumstances repeatedly, often to several different representatives. Currently, in many instances, you ll be assigned one person to work with you through the process who will explain each step along the way.

On January 10, 2014, new federal mortgage servicing rules went into effect. Among other things, one of the rules requires continuity of contact when a homeowner seeks foreclosure alternatives. Under the continuity of contact rule, the servicer must assign a single person or a team of personnel to help if you inquire about a way to avoid foreclosure. (The continuity of contact rule does not apply to open-end lines of credit, reverse mortgages, qualified lenders under the Farm Credit System, any loan that is secured by a property that is not the borrower s principal residence, and small servicers and certain government agencies.)

Additionally, the Homeowner Bill of Rights in California and Nevada also requires mortgage servicers to appoint a single point of contact (or team) if a homeowner requests a loan modification or other foreclosure prevention alternative. The single point of contact must remain assigned to the account until all loss mitigation options are exhausted or until the account is brought current.

The Loan Modification Application

To obtain a loan modification, you ll need to submit an application to your mortgage servicer. Often you ll need to provide:

  • a completed application (including your personal information, mortgage information, property information, and so forth)
  • recent paystubs (or a profit and loss statement if self-employed)
  • bank statements
  • tax returns
  • income/expense financial worksheet, and
  • a hardship statement or affidavit.

Don’t Hire a Loan Modification Company to Help You

In most cases, you are better off filling out the application and gathering the required documents on your own rather than hiring someone to assist you. Here’s why.

Saves money. It is much cheaper to just do it yourself than paying someone to do the paperwork for you.

Scams abound. The majority of loan modification companies are scams. They will take your money and you ll get very little in return, certainly nothing that you couldn t have done yourself. These companies may tell you they are experts at negotiating a loan modification, but there is no trick to getting a loan modification. There is very little negotiating that occurs in the process. The lender has certain requirements that borrowers must meet in order to get a loan modification, and if you meet them, you will be given a modification.

(To learn about other common foreclosure scams, and how to avoid them, see our Foreclosure Rescue Other Scams topic area.)

Efficiency in responding to inquiries. If you work on the loan modification process yourself, you can respond to any inquiries or requests from the mortgage servicer in a timely manner. Loan modification companies often fail to respond to requests from the loan servicer, which can lead to the loan modification request being denied. Also, you are in the best position to respond to any inquiries because only you know all of the details of your particular situation.

Getting Help

However, if you find that you are having difficulty understanding what you need to do to complete your application or are having problems dealing with your servicer, consider talking to an attorney or a HUD-approved housing counselor


How to Write a Hardship Letter for Mortgage Loan Modification, loan modification program.#Loan #modification #program


How to Write a Hardship Letter for Mortgage Loan Modification

A hardship letter is a key factor in getting approved for a loan modification program. If you can write a polite and accurate hardship letter, you may be able to convince your lender to give you another chance to repay your loan. However, writing such a letter can be intimidating for money borrowers, as they are unsure of what exactly to write and how much of their story to include. Lawyers can usually write one of these letters for you, but at too large a cost for a borrower experiencing financial hardship to afford. Luckily, writing your own hardship letter can be a simple process if you follow the steps below.

Steps Edit

Part One of Three:

Starting Your Letter Edit

Loan modification program

Loan modification program

Loan modification program

Loan modification program

Part Two of Three:

Explaining Your Hardship Edit

Loan modification program

Loan modification program

Loan modification program

Loan modification program

Loan modification program

Loan modification program

Loan modification program

Part Three of Three:

Perfecting the Letter Edit

Loan modification program

Loan modification program

Loan modification program

Loan modification program


How Do I Apply, loan modification programs.#Loan #modification #programs


How Do I Apply?

There are six agencies throughout the state that administer the program for MRC. Applicants should contact the provider in their region. To find out which provider will handle your inquiry, on the list and find the provider’s contact information on our contact page.

You can contact the provider directly for an application to be sent to you or download the following application: HMLP 2017 Application Loan modification programs . Applications should be sent to the regional provider, who reviews applications and determines initial eligibility. Homeowners hire the designer and/or the contractor of their choice to modify the home. The Provider Agencies can give you resource materials on choosing and hiring architectural, design, and contracting professionals but cannot recommend specific contractors. If you need assistance or reasonable accommodations during your application process, please let your local provider know.

How will applications be evaluated?

Applications are initially reviewed by regional Provider Agencies to determine both income eligibility and eligibility of the proposed modification. Applicants are then contacted by the Provider Agency and asked to provide additional information including, but not limited to: income, a professional’s certification that the modification relates to the individual’s functional need, and home modification plans, if available. Income verification will be requested in the form of photocopies of earning statements, tax returns, benefit confirmation and/or pay stubs. Applicants who show total household income in excess of 200% of HMLP income guidelines are not eligible.

If the income and proposed modifications meet HMLP guidelines for eligibility, the Provider Agency will then schedule an initial inspection of the property. This inspection will be conducted by a construction monitor, who will review the bid proposal and verify that the scope of work meets program guidelines.

If the application is determined eligible, the applicant will be notified by the Provider Agency by phone and can expect a Commitment Letter to follow which will include:

  • The type of loan for which the applicant is eligible, including rate and terms;
  • The amount of the loan, based on the estimated cost of the modification; and
  • Notification that the final loan amount will include the proposed costs of the work performed, plus other Property Owner/Borrowers fees, i.e. origination fees, closing costs, permitting fees, etc.

If the applicant is not eligible for the Program, you will be notified by the Provider Agency in writing. The Provider Agency will attempt to provide you with appropriate referrals to other programs or sources of funding for which you may be eligible. Some information on other programs can be found on our Resources and Links page.


What – s the difference between a loan modification, forbearance agreement, and repayment plan, loan modification programs.#Loan #modification #programs


What s the difference between a loan modification, forbearance agreement, and repayment plan?

Loan modifications, forbearance agreements, and repayment plans are different ways that borrowers can avoid foreclosure. Read on to learn the difference between these options and how they can help you if you are having trouble making your mortgage payments.

A loan modification is a permanent restructuring of the mortgage where one or more of the terms of a borrower’s loan are changed to provide a more affordable payment. With a loan modification, the lender may agree to do one of more of the following to reduce your monthly payment:

  • reduce the interest rate
  • convert from a variable interest rate to a fixed interest rate, or
  • extend of the length of the term of the loan.

Generally, to be eligible for a loan modification, you must:

  • show that you cannot make your current mortgage payment due to a financial hardship
  • complete a trial period to demonstrate you can afford the new monthly amount, and
  • provide all required documentation to the lender for evaluation.

Required documentation will likely include:

  • a financial statement
  • proof of income
  • most recent tax returns
  • bank statements, and
  • a hardship statement.

There are many different loan modification programs available, including proprietary (in-house) loan modifications, as well as the Fannie Mae and Freddie Mac Flex Modification program.

If you are currently unable to afford your mortgage payment, and won t be able to in the near future, a loan modification may be the ideal option to help you avoid foreclosure.

Forbearance Agreements

While a loan modification agreement is a permanent solution to unaffordable monthly payments, a forbearance agreement provides short-term relief for borrowers. With a forbearance agreement, the lender agrees to reduce or suspend mortgage payments for a certain period of time and not to initiate a foreclosure during the forbearance period. In exchange, the borrower must resume the full payment at the end of the forbearance period, plus pay an additional amount to get current on the missed payments, including principal, interest, taxes, and insurance. (The specific terms of a forbearance agreement will vary from lender to lender.)

If a temporary hardship causes you to fall behind in your mortgage payments, a forbearance agreement may allow you to avoid foreclosure until your situation gets better. In some cases, the lender may be able to extend the forbearance period if your hardship is not resolved by the end of the forbearance period to accommodate your situation.

In forbearance agreement, unlike a repayment plan, the lender agrees in advance for you to miss or reduce your payments for a set period of time.

Repayment Plans

If you ve missed some of your mortgage payments due to a temporary hardship, a repayment plan may provide a way to catch up once your finances are back in order. A repayment plan is an agreement to spread the past due amount over a specific period of time.

Here s how a repayment plan works:

  • The lender spreads your overdue amount over a certain number of months.
  • During the repayment period, a portion of the overdue amount is added to each of your regular mortgage payments.
  • At the end of the repayment period, you will be current on your mortgage payments and resume paying your normal monthly payment amount.

This option lets you pay off the delinquency over a period of time. The length of a repayment plan will vary depending on the amount past due and on how much you can afford to pay each month, among other things. A three- to six-month repayment period is typical.

To get information about these and other options to avoid foreclosure, see our Alternatives to Foreclosure area.


Loan Modification Programs That Work – An Overview of Options For Homeowners, home loan modification.#Home #loan #modification


Loan Modification Programs That Work An Overview of Options For Homeowners

Home loan modificationThere are many different types of loan modification programs out there today.

For the most part, you have a couple options depending on your lender. These are outlined below.

Almost every lender has an in-house mortgage modification program. This is simply your lenders own program that is approved under their own guidelines. Every lender is different, so every in-house program is a little different as well. They are often very similar to government programs described below. Most people apply for a government program with their lender and if that is rejected, apply for the in-house loan program.

There are also a government sponsored loan modification programs . These guidelines were set by government agencies and are used by many lenders, but not all participate.

Watch the video to your right if you are thinking of a government program or have been offered a trial loan modification. It is a great eye opener for homeowners.

Clearly, you can tell from this video that the banks are not always on your side. Be very wary of any home modification program you are approved for by your lender, especially of ones that include trial payments. It is always a good idea to have an attorney review your agreement before you sign it if you are doing this on your own.

With the government programs , if you qualify your monthly payments are reduced to 31% of your monthly income. This is accomplished by reducing your interest rate as low as 2%, extending the length of your loan and reducing your principal balance.

The government programs are the most sought after loan modification programs available. For those who do not qualify for these programs (for example your mortgage payment is already less than 31% of your monthly income), an in house lender option is usually the next step to take.

Now, while some people were affected negatively in the above video, there are many thousands of people who have been approved and have modified their mortgages. Here are some of the programs they have personally used:

Term Extension Loan Modification Program

With this kind of modification, you are asking for more time to repay your loan. With a longer term to pay you would also have a lower monthly payment. The length of the extension cannot be any longer than your current payment term. So if you had 15 years to pay off your mortgage..you would be allowed no more than an additional 15 years.

Reduced Interest Rate Modification

With this kind of mortgage modification, the lender will reduce the interest rate for the remainder of your loan. This will automatically result in a lower monthly payment. Remember this will only reduce the interest not the principle on your loan.

Step Rate Home Modification Programs

Unlike the reduced interest program which extends the life of your loan the step rate loan begins with a reduced interest rate and gradually returns to your current rate over a short period of time. So, if you are certain that you will be able to get back on your feet financially within a few years this may be the right program for you. But it s important to really take a hard look at your finances before taking this route. Many homeowners need a modification because they started off with a step rate loan, so carefully consider this option before you agree to it.

The rate reduction is only good for a few years. After that you will be back to making the same monthly payments you had before the step rate modification.

Of course, your lender can also decide to use a combination of any of the above mentioned programs to help you.

Principal reductions are a pretty rare happening . B of A has started mailing out principal reduction offer letters to thousands of homeowners as a result of a settlement. It is expected that other lender will also start to participate in the program if it is successful. Check out this blog post to learn more.

The goal of a loan modification program is to help homeowners afford their payments and this can usually be accomplished with a interest rate reduction or an extension of your terms. For example, taking a 30 year mortgage and extending it to a 40 year mortgage.

The only negative aspect to all of this is that most lenders reject a large majority of loan modification programs that are proposed to them by homeowners. To combat this, you may want to use a loan modification company to assist you in getting approved. Many companies will not charge you anything until your modification is approved. Watch the video on the top right of this page and see how difficult it can be to work with your lender

For questions about your current options (there are many!) just call 888-766-3693.

Click here to read reviews of no upfront fee loan modification companies who can assist you and help you get you approved!