Frequently Asked Questions on Mortgage Loan Modifications

What is a loan modification?
Why would lender agree to loan modification?
What is the Making Home Affordable Plan?
How long will the Home Affordable Modification Program be available?
Will the modified loan include property taxes and homeowners insurance?
What information and documents do I need for a loan modification?
How long does the loan modification process take?
Will the lender require an appraisal or inspection?
I received a notice of default from my bank; is it too late to save my home?
Should I try to do the loan modification myself?

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What is a loan modification?

A mortgage loan modification, also known as a loan workout, occurs when a lender agrees to change the terms of a mortgage in response to a borrower's long-term inability to repay the loan. The modified loan is made more affordable for the borrower in the hope that it will prevent foreclosure and bankruptcy. These loan modification changes may be permanent or temporary and generally involve a reduction in the mortgage interest rate (APR), a loan term extension, and a change in monthly payments.
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Why would lender agree to loan modification?

Lenders stand to lose a lot more with a mortgage loan default versus a loan modification. If a borrower stops making payments and collection attempts have failed, then a lender can either try to repossess the property, write off the loss, or wait till the person declares bankruptcy- in which case the lender will receive virtually nothing. None of these options are so appealing.
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What is the "Making Home Affordable" Plan?

Making Home Affordable is part of President Obama's housing stimulus plan. Through the program, eligible borrowers who are current on their mortgages but have been unable to take advantage of current lower interest rates because their homes have decreased in value, may now have the opportunity to refinance their loans.
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How long will the Home Affordable Modification Program be available?

The program expires on December 31, 2012.
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Will the modified loan include property taxes and homeowners insurance?

Yes. The modification payment will include a monthly amount to be set aside to pay taxes and insurance when they become due. This escrow will be required even if the previous loan did not include an escrow.
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What information and documents do I need for a loan modification?

• Information and documentation regarding monthly gross income.
• Most recent income tax return.
• Information about assets.
• Information about any second mortgage on the house.
• Account balances and minimum monthly payments due on all credit cards.
• Account balances and monthly payments on all other debts such as student loans and car loans.
• A letter explaining why your mortgage is currently unaffordable.

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How long does the loan modification process take?

From the time an application for a loan modification is submitted, you can expect to wait at least one to two weeks till the processing is complete.
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Will the lender require an appraisal or inspection?

Yes, the lender may require that your property be inspected to determine the living conditions as well as the property's market value.
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I received a notice of default from my bank; is it too late to save my home?

No. But the process has to start moving... and fast!
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Should I try to do a loan modification myself?

Yes. Why risk losing the opportunity to regain your financial health? Call us now, 1-888-250-5227
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