Qualifications For Loan Modification: Never Pay Up Front When You Get A Loan Modification
Countless changes have been implemented to the loan modification process since it was put in force in 2007. The primary impetus behind these changes has been the eradication of fraud by so-called service providers who opened up storefronts to fleece homeowners who were distressed due to imminent foreclosure. Their ruse was to charge up-front fees, do no work, and then inform the homeowner that they just did not qualify. Never pay an up-front fee for a loan modification – it is illegal.
There are not many qualifications for loan modification, but they are important. For your standard mortgage modification you will need to have a mortgage payment that exceeds 38% of your current income and you must have had the mortgage prior to January of 2008. You also have to be behind on your mortgage payments and owe at least 90% of the value of your home in the current market. The only other thing is that the loan you want modified must be for your primary residence. If you meet all of these requirements then you qualify to apply for a mortgage loan modification.
If you do not meet all of the requirements, do not lose hope yet. There are several other options that a good loan modification expert can explain to you that may also help you to keep your home. They can review any and all other available programs to keep you out of foreclosure. If you do meet all of the qualifications then you can get foreclosure proceedings stopped right away. Your current income will need to be reviewed to ensure that you can actually afford the modified loan amount. If you can, the next most important part of the process will be writing the hardship letter explaining what happened that made you fall behind, and how you will ensure that your modified loan will not fall behind as well.
Banks have certain requirements for loan modification. You will not get a loan modification just because you want one. The specific goal is to get the loan changed in such a way that the home buyer pays no more than 31% of their current gross income. Hardship – Most lenders want to seem some hardship to justify the loan modification. These can include divorce, unemployment, a forced job relocation, death of one who contributed to payment, or even a looming interest rate upswing. Misrepresentation – Some home buyers only had to present a statement of income to obtain their original loan. Many misrepresented their earnings to land the loan. The banks will require absolute evidence of income. If your salary does not qualify, you will not get the modification.
Final Tip: By researching and comparing the best loan modification companies in the market, you will be able to determine the one that meets your specific financial situation, plus the cheaper and quicker options available. However, it is advisable going with a trusted and reputable stop foreclosure specialist before making any decision, this way you will save time through specialized advise coming from a seasoned loan mods advisor and money by getting better results in a shorter span of time. Meaning getting your house out of risk as soon as possible.
Learn more about Obama Mortgage Relief Plan Qualifications
