It is amazing how many loan modification
companies
we have come across
that do not explain anything to their
clients and intentionally keep them
in the dark. Clients have the
right to
know the process and also should
have a good
understanding of the timelines and
milestones. The loan modification
process can be time-consuming and very labor
intensive as it requires numerous calls to
the lender negotiators, customer service
representatives and its attorneys.
The first
step in the process of loan
modification is to gather all your financial
documents such as tax returns, bank
statements, asset statements, credit card
statements, relevant notes, all monthly
utilities, leases, and all other financial
obligations that require monthly payments.
Using these documents, you are required to
put together a monthly budget for your
family that shows all your total income
(incoming money) against all your monthly
payments/obligations.
This is the
single most important document
which shows your personal balance sheet and
communicates with the lender your financial
strength/lack of it. Lenders will take all
these numbers and determine if you qualify
for a loan modification or you make too much
or too little money to qualify. We can not
stress the importance of the budget
worksheet as it can determine whether the
lender will work with you or not.
This is
where we can help you since we know the
lender’s guidelines and income windows that
they will work with, we can help
you manage your financial situation to have
a better chance of qualifying for a good
loan modification program. Other documents
that need to be submitted are the hardship
letter which explains your particular
financial situation and how you got there in
the first place as well as other documents
that are relevant in your particular case.
Once the financial worksheet and other
documents that we mentioned are completed,
we will
analyze them and make recommendations
that will improve your chances of getting
your loan modification approved. If you are
doing the loan modification on your own,
this is the valuable service that will be
lacking that has a very significant
importance in the outcome of your file. Once
the package is completed and a quality
assurance is performed, the package is
submitted to the respective lender’s loss
mitigation department.
After your package is submitted to the
lender, it may take 5-10 calls to track it
down and make sure they have received it.
Lenders are
infamous for losing these packages and not
getting them logged and assigned to a
negotiator or a team. Once they
receive the package and acknowledge the
receipt, the actual hard work starts.
If you are doing the work,
be prepared
to spend as much as 30-60 hours tracking the
negotiators, negotiating, and
working on a resolution on your case. It is
important to remember that the negotiators
and the loss mitigation department are
employed by the lender and is there to
protect their interest, not your interest.
So they will work very hard to get the best
deal for their employer, not YOU.
The
negotiators are also very overworked as we
have heard of each one having as many as
300-500 files at a time! This could
be a very high-stress job for a relatively
new department that has no prior experience
in this field. When you combine their
workload with a very stressed home owner in
the brinks of foreclosure, it generally does
not create a pleasant experience for either
party. The negotiators only take calls
during certain hours and
require a
clear and focused individual to deal with
them at their level. We routinely
find that homeowners that have taken up the
loan modification process on their own have
been very frustrated and have not received
results that they hoped for and have had
much higher failure than if they hired us or
another professional loan modification
company.
Once the long and draining negotiation
process is over, the next step would be that
an agreement is reached between the
bank/lender/servicer and our company on your
behalf (or yourself if you are decided to do
it on your own).
This last
portion can be tricky and will
require skills, patience, toughness
as the negotiators will push very hard to
settle the case for a more favorable result
for their employer. Assuming that the last
process went well as planned, you will
receive a new package with new terms of the
loan. This could be a
reduction
in interest rate, reduction/elimination of
the penalties, forbearance , principle loan
reduction or a combination of these items.
Make sure that the package terms match what
was agreed on the phone as it is not
uncommon for these terms to be different
than what was promised on the phone. Make
sure that you had good notes and was
verified at the time of the negotiation and
if your package that you received with new
terms is different than what was promised,
you should contact the negotiator
immediately and bring up the discrepancy and
resolve it right away.
Once you have all the terms of the loan as
it was agreed upon, you will sign/notarize
the new document and that becomes your new
note with all the new stipulations.
Be prepared
to spend many hours and don’t give up as it
is your home that you have worked so hard
for.
If you have any questions or need
assistance, please contact us.
