Fox 35 News Orlando visited with us for about 45 minutes on Martin Luther King Day. The interview was cut down drastically to fit their time constraints but we thought we would include the video and some more important tips that people need to be aware of when your looking at a loan modification. Here is the Fox News piece:
Now what we want to add is that people need first be aware that they can do a loan modification all on their own without the assistance of a loan modification company. Modifying your loan is NOT like doing a new mortgage. You are strictly modifying the existing mortgage note you have with your lender therefore it is a transaction strictly between you and your lender. There are some simple steps you can take to help ensure that you will succeed in modifying your mortgage loan. Please follow these steps to help ensure you get the modification you need:
1. Request a loan modification from your lender. They will send you a packet in the mail for you to fill out and send back. It is usually pre-paid so you don’t have to pay anything to send it back to them.
2. When you receive the package read the instructions carefully. They are going to request a list of documents from you that you wil need to return to them so they can evaluate your situation and determine what type of loan modification is best for you. The documents you should be prepared to send them include:
- Last 2 years W-2s
- Recent Paystubs
- Two months bank statements (all pages with your name and acct number on them)
- If self employed – Last 2 years tax returns and six months business & personal bank statements (all pages with your name and acct number on them)
- A Zillow printout of the current value estimation of your home
3. A completed financial disclosure (they will provide the disclosure you just need to fill it out completely with your expenses and your income.
4. A completed hardship letter.
Now the single most important thing you need to know is that you absolutely MUST provide everything all at once when you send back the package. The worst thing you cand do is send some info and try to send more later. This will ensure that your loan mod is dragged out for months. DON’T LET THAT HAPPEN TO YOU! Send everything they are asking for the first time!
Regarding the finanical disclosure page. This is where many people loose their modificaiton. They put all of these crazy expenses and try to make themselves look destitute. DON’T MAKE THAT MISTAKE. You want to be as accurate as possible with your expenses such as gas, food, cloths, daycare, etc. If you make yourself look too bad they will assume that there is no way you will be able to afford your payment even if they modify your loan for you. This is why you should show a deficite as the bottom line, but not too big a deficite. You want to show them that if they lower your monthly payment you will be able to afford that payment and maybe have a couple dollars left over. This is the only area that professional advice can usually be helpful on. If your completely lost on this one just call up whoever does your taxes for you and ask for some help trying to determine what you want to show as your expenses and monthly deficite. They will be happy to help you figure it out for free in most cases.
The other area that deserves special attention is the hardship letter. This is your opportunity to speak directly to the person that will be reveiewing your loan modification request and explaining to them several things. Here are the main points you should cover in your hardship letter:
- Why you can’t refinance your home (Examples of this are if you owe more than your home is worth, Credit restriction at banks have become unrealistic and are preventing you from being approved, your loan adjusted and with the payment increases you have been unable to keep up with your payments which ruined your credit, etc..)
- Why you can handle a lower payment (detail out exactly what payment range you can comfortably make. Explain how lowering your payment will allow you to keep your payments current from here and out and also improve your credit situation so you can refinance in the future)
- How your financial hardship has affected your life (If you want to vent to someone here is your chance. Let them really know what the financial burden has done to you and your family)
- How adjusting your mortgage will improve your life (explain in your own words just how much this modification means to you)
- That Once modified you will do everything in your power to not miss a payment going forward. (reassure the lender that your mortgage payment comes first in your book before all other bills you have.)
We have lots more tips and info for you regarding loan modifications. We will do future articles to help you understand and become more educated about loan modifications and how to ensure success with your loan mod request.
In the meantime be very wary of loan modification companies taking upfront fees from you. There are some things you need to ask them. If the answer is no to any of these, DON’T DO BUSINESS WITH THEM:
- Are you working with an attorney?
- Will an attorney be representing me?
- Is my upfront payment fully refundable if the loan modificaiton is not completed?
- If not how much is refundable?
- Can I get everything in writing prior to doing business with your company?
Tags: florida loan modifications, how loan modifications work, how to do a loan mod, loan mod, loan mod process, loan mod scams, loan modifciation help, loan modificaiton process, loan modification companies, loan modifications, stop foreclosure
