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 business that shows all your total income (incoming money) against all your monthly payments/obligations known as profit and loss statement (P&L statement). Your accountant may already have one for you.
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. 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 much 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.
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. 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.
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.
If you have any questions or need assistance, please contact us.
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 business that shows all your total income (incoming money) against all your monthly payments/obligations known as profit and loss statement (P&L statement). Your accountant may already have one for you.
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. 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 much 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.
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. 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.
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.
If you have any questions or need assistance, please contact us.