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What is a standard loan modification? A loan modification is a modification to an existing loan made by a lender in response to a borrower's long-term inability to repay the loan. Loan modifications typically involve a reduction in the interest rate on the loan, an extension of the length of the term of the loan, a different type of loan or any combination of the three. A lender might be open to modifying a loan because the cost of doing so is less than the cost of default. What can a loan modification do for me? The goal of loan modification is to work out an agreement between the homeowner and the lender that will stop foreclosure proceedings permanently. This allows you, the homeowner, to stay in your home and protects your credit history. Our company specializes in resolutions of mortgage delinquencies or home foreclosure claims on behalf of you, the homeowner. We perform a detailed financial analysis and work with you to determine your best alternatives. We review your lender’s loss mitigation policies and your state's foreclosure law to make sure that we give you the best service within the context of your situation. By working with you and your lender, we can tailor a resolution to meet your specific criteria and financial circumstance. We do all of this quickly and effectively.
Several companies have contacted me recently offering to help. What's different about you? There are many predatory companies who are not what they appear to be. Beware of unscrupulous companies who are actually just interested in buying your house at a big discount, or attorneys who just want to take you into bankruptcy or companies that collect a consultation fee then do nothing for you. Unlike the others, we conduct a complete audit of your loan documents to determine if there was compliance with consumer protection laws. A detected failure will provide us with additional leverage to negotiate with your lender. I've already talked with my lender and they just want all their money. Can you still help me? Yes. Most of our clients have experienced this kind of inflexibility from their lenders before calling us. We get your bank to listen to your needs because they typically respond to a contact from our attorneys and to a report based on the audit of your loan documents. Our staff has over 15 years of experience. We have handled thousands of home mortgage matters. That kind of experience gives us credibility with your lender. Over the years, we have developed positive working relationships with key people at most banks. Our integrity and professionalism have earned us a reputation that allows us to be heard when no one else can get through the red tape. We will use our experience and connections to your advantage. How long has your company been doing this? Our staff has over 15 years experience in home mortgage brokerage and closings. The client must be realistic. The real estate crisis has only been in play for about a year and “loan workouts” only became common practice in the last 6 months. There are no seasoned experts. Should I accept the first offer for a workout solution? Many lenders will offer workout solutions quickly and efficiently, but most of these are “boiler plate” solutions, which often maintain the greatest benefit to the lender at the expense of the borrower. If you are offered a workout solution from your lender, we would encourage you to make contact with us for a free review of the proposal. We find that no more than 20% of upfront offers are very generous, 14% are fair, 21% leave more to be desired, and 45% are not fair solutions.
What changes occur within the mortgage with a loan modification solution? Examples include: a variable rate may become fixed, interest rate may be lowered, the time period for payment may be extended, or a combination of these arrangements.
How do banks and other lenders perceive loan modification? Would they rather foreclose? Banks do not prefer to foreclose to a reasonable, workable loan modification. They have more real estate in their portfolios than they can handle. The average foreclosure costs the lender $50,000, and in today’s economy the number of foreclosures is growing at an alarming rate. It is almost always in the lender’s best interest to participate in a loan modification program.
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