How do we know what to do to help you get your loan modified?
It is a stair step analysis process that begins like this:
First, are you behind in your payments?
If not, then you may obtain a "regular" refinance. We would try that first. But, it takes
the cooperation of your existing lender to reduce the principal balance of your loan. It
also requires that your credit scores are pretty good. This is for people who can see the
future and know they will not stay in their home if the payments stay the same or go up.
If you are behind in your payments we move on to other types of loan modifications:
Some come via the government programs, but so far, all of these require the cooperation of
your existing lender to take less of a payoff for your current loan. Some programs even
involve FHA becoming an "equity share" owner in your property. Some programs just defer the
principal balance between what you presently owe on your property and what the payments
will be based on. After a certain number of years, or if you sell or refinace the property, the deferred
principal balance has to be paid back. Most borrowers don't find this too appealing. Are
you a tenant or an owner when it is all said and done?
Then we move on to approaching your existing lender directly. What they want is a full
loan application package, just as if we were applying to them for a new loan. This means
they want a loan application, income documentation, comparables sales for your property. We
can prepare the package for you for $400. With this information, your present lender may
do the loan modification, but probably there will not be a principal reduction. They will
charge $800 for the loan modification. This is an estimate, but it is the customary fee
today.
What if they say no? Well, then we take your package to an attorney that submits the
application to your existing lender again. Usually he gets better responses than an
individual will, but he charges $1,500 for his work. So then, you have a total of $1,900
invested in the loan modification. The attorney will charge more if your home has already
gone to the point that the notice of default has been filed. This is another $1,000. Or, if
your loan is over $700,000, then he charges another $500.
Please call Sellens Real Estate Lending for more specifics regarding you and your loan. No charge for us to talk on the phone.
