Home Mortgage Modification Information

Modifying your Mortgage

These days keeping your home, your home is harder than ever. There is modification programs out there designed to help you. You don’t necessarily need to be behind on your mortgage to qualify for programs through your mortgage bank. You do need to show that you are in imminent default and have a legitimate hardship. If you only want a lower interest rate, this is not a hardship.
You’ve heard of the Making Home Affordable modification plan that the Obama administration has signed. This modification program is designed to help homeowners stay in their homes. It does not qualify everyone for a modification. Check out the website www.makinghomeaffordable.gov to see if you can qualify for review from your mortgage company. That is the main key, do you qualify for review for the modification program. What the program looks at: gross income compared to your mortgage payment with the property taxes and homeowners insurance included (escrow-exempt in CA), is your mortgage payment 31% of your gross income per month. This 31% does not include any other bills per month; it is only based off your gross per month and your mortgage payment per month.
If you have a first mortgage (only 1st mortgage qualifies) then contact your mortgage company. They will be able to instruct you on what information needs to be sent for the modification, and how long you need to wait. Always, Always keep in contact with your mortgage company, not to the point where you are calling everyday or multiple times per day, they really don’t want to hear from you that often. Calling on checking on the account once per week will suffice.
If you feel that hiring someone and paying them to get a modification for you, than go ahead and waste your money. No company can guarantee a modification. If you qualify under the thousand(s) page report that is given to every mortgage company, then they will give you what you qualify for. There are no negotiations with modifications. The investor of every loan already has decided what programs your mortgage company can offer you, if you qualify.
Modifications are difficult to understand. Unless you actually work for the loss mitigations department as someone who reviews these mortgages, you will never understand how the come to the decision they have. Anyone who starts the modification process needs to know it is stressful, time consuming, and stressful. You need to make sure the mortgage company has all the information they need, it is your responsibility not theirs. You must understand, loss mitigations is handling, most large banks, hundreds of thousands of loans. With the stress on banks to cut costs and modify loans all at the same time they cannot afford to look out for you. You must look out for yourself. Never let anyone tell you not to contact your mortgage company or stop making payments, this is the worst thing you could do. There will be a blog later to discuss the FHA loans.
When filling out the paperwork for the modification, be as accurate on everything as possible, and remember don’t include any funds that have a penalty to withdraw, example 401k.
You must foremost understand that if can no longer afford your home, have no income, and have been living beyond your means than the best thing to do is sell your home. Whether you can get what you owe or not, selling is the best option for you. You need to set aside your pride that this is your home and are going to stay in until you decide to leave is a big mistake. I understand this is your home you designed, built it, lived in for 20 years, had started your family in it, and so on, that doesn’t mean you can still afford it. Sell your home! The next blog will help explain how to sell your home at a short sell or pre-foreclosure sale and what it is.