Frequently Asked
Questions
What is a “Loan Modification”?
What is a “Deed-in-Lieu of Foreclosure”?
Do I Have To be Behind on My Mortgage?
How Long Does the Process Take?
Why Would the Lender Agree to a Loan Modification?
What If I have More Than One Mortgage?
What is a “Loan Modification"?
A loan modification occurs when your current lender modifies the terms of an existing loan, by any one or a combination of the following: reducing the interest rate and amount of your payment, extending the term (length) of the loan, changing the length of the payment period to a new, specific term (such as ten, fifteen or thirty years), or a combination of some or all of these terms.
The purpose of a loan modification is to keep you in your home. If you have experienced a recent hardship and your household income has been reduced, or your mortgage rate has adjusted to an amount you can’t afford, and you want to stay in your home despite these issues, a loan Modification is for you.
A short sale occurs when you sell your home for less than the amount owed on your property. We will negotiate with the lender to accept less than the full balance owed and forgive the difference. In turn, you move away from the house. Due to recent legislation, the tax that you would ordinarily pay in connection with what is called “forgiveness of debt income” is not paid if the property that is the subject of the short sale is your primary residence.
What is a “Deed-in-Lieu of Foreclosure”?
A Deed-in-Lieu of Foreclosure is a device that allows you to immediately turn your home over to your lender in exchange for the lender eliminating any potential deficiency against to like in a short sale to save both you and the lender the headache and expense of a foreclosure.
Do I Have To be Behind on My Mortgage?
No. If you’d like to be proactive you can begin negotiating with the Lender even if you are current. Depending on the circumstances though it may give the Lender incentive to work with you if you are in default of your obligation.
How Long Does the Process Take?
Every individual case is different. On top of that, every Lender has different policies. Typically though, the process will take several months to complete.
Why Would the Lender Agree to a Loan Modification?
Banks are not in the business of owning real estate. It’s in the business of loaning money so the lenders objective is to make sure your loan is performing by getting monthly payments by you on time so it can make money from your interest payments. If you are unable to make the payment it is in the lender’s best financial interest to do whatever is necessary to help, especially if the property has little or no equity (i.e., you owe more than the property is worth), in which case the lender stands to lose even more.
The financial real estate market has changed dramatically. It is much harder to qualify for a new loan now than it was just last year because of the banks’ tightening of guidelines. In addition, like many American Homeowners, it isn’t possible to refinance when you owe more on your house than what it’s worth.
What If I have More Than One Mortgage?
This is very common. We will correspond with all of your lenders and work to attempt to obtain the results you deserve from each of them.