The good news
…is that the average Glendale Home Owner is doing reasonably well, thank you very much. Most are hunkering down but able to make the mortgage and many are even looking for great investment property.
However. However. There are those who are in trouble and in need of intervention or they will slide into foreclosure. What is the first step?
What is a loan modification?
A loan modification is a process where the homeowner works with the bank to modify the terms of the loan. The goal is to make the mortgage payments more affordable so the homeowner can stay current.
Who is eligible?
Typically the banks will look at people who had some sort of adjustable loan- a really low starting rate or a “neg-am” where part of the payment was actually tacked onto the original loan amount. If you have a standard fixed rate loan, a loan mod will be hard to get.
What do I do ?
It all starts with telling the bank you are in trouble. Each bank has it’s own process, but it always involves proving that you have a hardship- loss of job, spouse, or the loan adjustment is too much to handle.
The bank will want two things to start, a letter detailing this hardship and a financial statement detailing your inability to pay.
Theoretically, the bank will see the hardship, maybe ask for additional documentation and then make an offer to modify. Right.
What you really need to do
Find a skilled loan modification specialist. You need someone who knows what the banks need to see and how they like the information presented. Every bank is different and a skilled negotiator will make a big difference. Much has been written about fraud in this area. Beware of the negotiator who demands large, upfront, fees! Here is a list of approved advance fee negotiators:
CA Department of Real Estate Advance Fee Agreements
Here are other great resources:
Non Profit Housing Counseling Agencies
Self Assessment Questionaire to see if you are likely to qualify for a loan modification
HUD’s list of FAQ (frequently asked questions) about Loan Modifications
Bankrate.com has a great article on the loan modification process with links to several leading banks that have signed up for Obama’s Making Home Affordable Program
Kendyl Young
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