Tips For a Sucessful Modification
Although we don’t recommend negotiating a loan modification yourself, circumstances sometimes dictate that we have no choice. We wish we could help everyone for no charge but in our expertise comes at a cost of our own overhead, majority of it is to meet the payroll for the processors and mitigators. If you cannot afford to have proper representation with your lender and want to try to modify your own loan, we are happy to offer some tips so you can get your mortgage modified sucessfully.
These are some of the points we use that you might be able to use for the most favorable outcome. Just remember it is negotiation and the lender will look out for their own interests.
1. Do your homework on your lender and try to find out their root rate, it can sometimes be as low as 2%! If you cannot find out the root rate of the lender you may have to wing it as to how low they can go on your interest rate.
2. Produce a complete financial prospectus to show the bank what you can actually afford and how they can best restructure your loan so that they believe you when you tell them that you can keep making payments for years to come.
3. Compose a letter of hardship formulated into a compassionate and easy to understand letter telling your lender why you need financial relief. Remember that you will not have previous experience on what the lender wants to hear so do more homework online to find other people that have scenarios similar to yours. Find out from them, what was successful and what types of scenarios were denied before drawing up your letter.
4. Produce a cost benefit analysis to show your lender EXACTLY what they stand to lose if they don’t modify your mortgage. Point out the costs associated with the pre-foreclosure, Foreclosure and bankruptcy process. The costs for missed property tax and home owner’s insurance, attorneys’ fees, and eviction notices will also show how much they stand to lose.
5. Supply a comparative market analysis on the property to show your lender exactly what your home is worth in today’s market. This helps them to understand even more of why they should restructure your loan with you.
6. Draw up atleast 2 loan scenarios that make financial sense to both you and your lender. Show them how much they stand to make in the coming years by accepting one of these two proposals as opposed to actually foreclosing on your home.
7. Have all of your documents scanned and ready to email or fax to your lender should they ask for them.
8. Know the program for which you qualify before calling your lender because if you ask apply to the wrong program, you will only be denied and may not have an opportunity to start over again.
9. Most Important Follow-Up, Follow-Up, Follow-Up, Follow-Up atleast once a week.
Please be very diligent in your negotiations as in our experience we have seen and heard nightmare stories when dealing with the lender directly.
If you think that your lender’s offer is not the best offer they can produce, don’t give up! Keep negotiating until you get the job done, but by no means allow your home to go into foreclosure!