5 Home Loan Modification Tips
Home loan modification is the only thing standing between millions of Americans and the nightmare of foreclosure. However, pity is not the only criteria for approval. It can be a daunting experience to discover that you might not be able to make your monthly mortgage payment.
While refinancing is an option, it is not favorable because you would have to renegotiate a fresh loan whereas home loan modification can give you that much-needed breathing space by revised terms on your initial loan agreement. Thanks to loan modifications someone who has hit on hard times can earn extended payback periods, lower interest rates, partial payment options and in rare cases; even have their debt forgiven.
Here are five home loan modification tips to keep in mind, because this is quite literally the roof over your head that is at stake here. It does not get any more serious than that.
1. Get help; the Professional Variety
Yes, you are a “great negotiator” but you are in a bind and this might not be the best time to take risks. Invest your time and money in a decent professional. A housing counselor can be a godsend for folks that have just had their first rejection from a mortgage servicer. Many people are not well versed in the “ways of the mortgage loan world” and can have their requests denied.
Good representation can really be a game changer for you. Not only do counselors raise your chances of securing a loan modification, they also negotiate a better offer and workout bearable terms to get more relief. The counselor makes an offer they can’t refuse because they are professionals. Naturally, this is not a given in every scenario and some applicants do get rejected even when they have the might of a professional on their side. In such cases, the counselor can make a counteroffer that is more suitable.
2. Nothing beats a Thick stack of proof
Keep a track of EVERYTHING. Note down the names of people you talk to, the content of each conversation, email, application, and form. When you have all your documents in order, you are a formidable foe; your act is together and will not be denied because you kept a record of every tiny detail. This process has made you literate in the language of mortgage adjustment loans. So a large stack of documents can substantially increase your arsenal when you face a mortgage servicer.
3. Own that Credit History
According to an independent survey; nearly 35% of Americans in 2017 had no savings in their bank accounts while many were not equipped even to handle a thousand dollar emergency. It is scary just how much Americans believe in the power of the credit system.
While we are historically notorious for being poor financially we were never lulled into a false sense of financial security. Most Americans are spending more than they have and believe they are richer than they actually are, leading to a rising culture of credit card debt.
One important aspect of trying to secure a home loan adjustment is to own up to your financial mishaps and swallow your pride if your “Gucci Shoes” or that new flat screen light up on your credit history like a Christmas tree. If you show no remorse to the mortgage servicer or your bank, chances are your loan modification will be rejected.
4. Leave yourself breadcrumbs
Leaving yourself a paper trail is perhaps the smartest way to navigate through the entire process with your sanity intact. Make sure to note down how the entire process went so that you may repeat it if the need arises. If you kept a track of everything and need assistance again you have a much better chance of securing a modification.
Since there is a lack of financial literacy many people will return to secure another bailout. Since these “Frequent fliers” are so common, any legitimate case tends to slip through the crack or get lost in the long list of serial defaulters. To avoid becoming a part of the wrong pile, make sure you can backtrack your entire process by following those breadcrumbs. Asking for cutbacks, relief and modifications is hard the first time but the second time can be impossible.
5. If at first, you don’t succeed, complain to the OCC
If your loan modification gets rejected, filing a complaint with the OCC’s “HelpWithMyBank.gov” can put you back on your local bank’s radar. Filling a complaint really focuses attention towards you and no matter how poor your application, it will get due notice. The progress of the complaint can be monitored online.
Birds in the Same Stress, Stress Together
It is always better to be in the loop. If you socialize with others who are struggling for or with loan modifications, you will definitely be more aware of other issues and perspectives to the problem. Since everyone shares the same issue they are all on the same path to foreclosure. Joining hands can lead to a more creative solution and while what works for one doesn’t necessarily do so for another, more research means more options to try out.
There is very little that can save a home that is under constant threat of foreclosure. Americans need to save and control their finances better, so that no one loses their home because of poor credit histories, at least. While many applicants are people who are going through a crisis, there are just too many Americans with a general disregard for a “savings culture”. Relying on credit is a risky business and so many hardworking citizens tend to fall into this trap, where they didn’t save anything for their retirement or a difficult situation whereby mortgage becomes a problem.
Max Cash Home Offers offers instant cash offers on houses nationwide. We do not provide legal or financial advice. For information on foreclosure, eviction or any other legal situation make sure you contact a local attorney.
Author: Ryan Cruz
Ryan received his Bachelors of Science in Business Administration from the University of La Verne. Ryan has a strong passion for marketing and the real estate industry while leading and managing all online marketing efforts for Max Cash Home Offers.