Loan Modifications

Find out about  how you MIGHT be able to avoid foreclosure
and save your home by obtaining a loan modification from your lender.

Facts About Loan Modifications

Although it might be possible to save your home by obtaining a loan modification, it's only suitable for a few.

CAUTION: Obtaining a loan mod could HURT struggling homeowners more than help. Find out more by reading below.

The Truth About Loan Modifications

What is a Loan Modification?

Basically, obtaining a loan modification is very similar to refinancing. Homeowner's facing foreclosure work with their current lender to refinance their home. This usually involves adding the total amount of missed payments, interest plus penalties, and tacking it on to the backend of the loan. Once complete, the homeowner's loan is current and of course, he or she is no longer facing foreclosure.

Government Assistance Programs Expired
Nowadays, lenders are much less motivated to help homeowners with loan mods, mostly because government assistance programs such as HAMP, are no longer available.

Behind in Payments Due to a TEMPORARY Loss of Income

Loan modifications are only intended for those borrowers who are behind in their mortgage payments due to a TEMPORARY loss of income. You MUST prove the problem is solved and you have an acceptable income level in order for the lender to agree to work with you.

Seriously Consider Your long Term Financial Future

Yes, we know this is much easier said than done, but when facing any financial crisis we must do our best to treat it like a business. Sometimes it just makes no financial sense to put ourselves even further in debt with a loan modification while trying to save our homes. Consider, even if the worse is to happen, eventually YOU WILL RECOVER and it's very possible the best decision for your financial future is to short sale your house and walk away. Yes, make as graceful of exit as possible, but do so with your head held high and know a brighter future is in store.

Be Very Cautious

If you have received a NOD but are also working on trying to get a loan mod, be very watchful of your timeframe. Loan modifications take time! Lenders often drag their feet. If your plan is to try for the loan mod and if unsuccessful, try for a short sale, WATCH your TIMELINE! It also takes time to do a short sale transaction and usually there is NOT ENOUGH TIME FOR BOTH. The best course of action is to make a decision on either a loan mod OR a short sale and take action. In California, the foreclosure process typically takes a minimu, of 120 days.

Qucik Facts About Loan Modifications

67% Defaulted

Back when the economy failed, many homeowners obtained loan mods. 67% ended up defaulting in the first year, losing their homes to foreclosure. 

Loan Mods only Delay Foreclosure

Knowing a loan default was likely, lenders were eager to squeeze homeowners every dime possible before eventually foreclosing.

Successful Loan Mods

YES, loan mods can work, but ONLY IF you have truly recovered and now earning income that is equal to, or greater than before falling you started falling behind in your mortgage payments.

Your Future Wealth

Always determine the true cost of a loan modification vs what you owe on your home AND your home's value. Remember, a loan mod is going to cost you even more, so make sure it's worth it.

Seek Expert Advice

Discover Your Options

We can help!

If you're struggling and behind with your mortgage, contact us and we'll help you determine your best options and solutions. We recently sold a home for a client who only thought he needed to short sale. As it turned out, we sold it as a standard sale and he was able to completely pay off his mortgage and walk away with a fresh start.

Options to Avoid Foreclosure

  • Short Sale

    A short sale is most likely your BEST option to foreclosure. It critical to use a Certified Distress Property Expert who teams with a professional negotiator.

  • Forebearance

    Arrange a temporary repayment plan with your lender. This might work, if you really have recovered from your financial difficulties.

  • Refinance

    If you can qualify, obtain a new loan with lower monthly payments. Usually NOT a viable option.

  • Rent the Property

    You may be able to rent the property but you must bring the loan current first.

  • Deed in Lieu

    A "friendly foreclosure" and not recommended. It's kind of like pleading guilty for a crime without having a lawyer.

  • Bankruptcy

    Filing for Bankruptcy will stall foreclosure but NOT prevent it. Obviously, you'll need an attorney before doing anything.

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