Will a home loan modification really solve your problem?
A home loan modification can help you stop foreclosure proceedings. It may not save your home. First let’s discuss whether you are eligible for a loan modification or a HARP home loan modification. If you had a reduction in your income but you are still employed a mortgage lender will consider a home loan modification. If you’re unemployed most mortgage lenders will most likely not approve a loan modification. In any event you should always apply for a home loan modification. The modification process can take months for a mortgage lender to approve. The job market is more stable then it’s been for a few years and you might just find a job during the process of the home loan modification. Additionally, the mortgage lender will not proceed with the sheriff sale provided you are completing all of the necessary paperwork in a timely manner. Some of the documents they will need are past tax returns, recent bank statements, copies of payroll stubs, etc. Most lenders will provide a checklist of all the information necessary for a loan modification on their website.
Start by either accessing your lender’s website or by calling them to obtain their requirements to get started on your home loan modification application. Be very thorough when completing the paperwork. Submit all of the paperwork in one package, fax or email. Sending documents one at a time will cause confusion and could delay the process. It can be very frustrating to get a home loan modification processed. Many times the lenders will ask for information repeatedly. Please be patient and follow up with your lender regularly to make sure they’ve received your documents. Keep very good notes on when you contacted the lender and to whom you spoke with. If you find you’re not getting anywhere, please contact me – I may be able to help.
Once the home loan modification has been approved, you must make your payments on time. Please make sure you can manage the payments because if you’re late even one time you will be right back where you were when you started the home loan modification process. This is non-negotiable with most, if not all, lenders. If you know in advance you will not be able to maintain current payments then the loan modification will result in a temporary delay of a possible sheriff sale. Why throw good money after bad? If you are unable to meet the requirements of the loan modification offered by your lender or the modification has been denied, it may be time to consider selling your home. Selling your home under these circumstances will likely require a short sale.
A short sale is when the lender accepts a payoff for less than what is owed on the property. A short sale will cost you nothing and will postpone the sheriff sale, giving you more time in your home. I’ve helped over 70 homeowners sell there home via a short sale. In many cases these homeowners have received relocation monies from their lender ranging from $3,000 and up. Click this link for more information on short sales.
You may also be thinking about filing for bankruptcy. Bankruptcy attorneys will charge approximately $2,000 to handle this for you. Bankruptcy is a reorganization of your debt and will postpone the sheriff sale. If you have other debt besides your mortgage this may be an option for you. But before hiring an attorney, make sure you understand exactly what will happen with your house. If you can’t make the payments you will be right back where you left off in the foreclosure process except you’ll have spent money with a bankruptcy attorney. A short sale will not cost you anything and will postpone the sheriff sale. I have extensive experience with short sales. Don’t hire a part time agent or an agent with limited experience to process short sales. Even worse, some agents subcontract out the short sale work to a third party negotiator. Please review my blog about working with agents who use a third party negotiator. Most agents are not experienced in short sales. If you hire the wrong agent and your home does not sell you will be right back in the foreclosure process. Let me show how I can help you. Contact me today. Like so many of my clients, you’ll be so happy you did!
by Rick Sheppard