WE RECOMMEND NOT PAYING A SET AMOUNT UP FRONT FOR ANY TYPE OF LOAN MODIFICATION!

Renegotiate with the Lender- This is commonly known as “Loan Modification Programs”. These programs have been around for many years, yet the banks and lenders don't want you to know about them! They typically won't say anything unless you directly ask about a loan modification. Typically there are rules, qualifications and precursors for these programs. Now remember that the rules for each lender are different and are constantly changing. With $75 billion dedicated to reworking troubled loans from President Barack Obama's ambitious housing and mortgage resurrection plan passed in March of 2009, the loan modification programs are becoming easier to acquire. There are six important points of this new bill:
    1. Payments not price- The plan centers on the belief that struggling borrowers will stay in their homes—even as values decline sharply—as long as they can make their monthly payments.
    2. 31% The plan has requirements for the participating lenders adjust monthly payments to no more than 31% of monthly gross income.
    3. Cash Incentives- Each lender will receive $1000 for each loan modification they have completed. Then the lender will receive another $1000 for each year up to three years after the modification if the borrower continues to make the payments.
    4. Financial Hardships- Only owner-occupied, primary residences with outstanding principal balances of up to $729,750 are eligible showing financial hardships through documentation including tax returns, credit reports and other documentation. Only loans originated on or before Jan. 1, 2009, are eligible, and modified payments will remain in place for five years.
    5. Net Present Value- To determine the net present value there is a test. The test compares the expected cash flow that the loan would generate if it is modified with the expected cash flow it would generate if it isn't. If the modified loan is expected to produce more cash flow for the mortgage holder, the servicer is to restructure the loan. Breaking it down into laymen's terms, the “newer” the loan the more probable you will qualify to be modified.
    6. Second Liens- The Obama plan is offering incentives to wipe out home equity lines of credit and second mortgages. This process is very unclear and is written in very vague terms. It is also unclear as to how the lenders for the second notes are going to be paid off.
       
       
       
      If you need more information on how we may help you navigate through this process, email or call us now!