People started looking for Loan Modifications as early as 2007. Back then, banks weren’t likely to grant them. They preferred to try to wait out the recession without taking the loss. As the foreclosures started to mount up, they soon realized that it was better to take a small loss than a large one. For the most part, they have decided to stall. Prior to this decade, no one had really ever set out to modify hundreds of thousands of loans.

In the beginning, shady con-artists tried to take advantage of the situation. There were no specific rules to follow and many people lined up to take advantage of the situation. This was quickly remedied. Most states passed laws and some now have licensing agreements.

There are many people like you who have managed to hang on but are slowly drowning a painful financial death. In many cases you would have been better to just walk away from the house when you first started getting in trouble. You would have had a year to two to reestablish your credit.

On the other hand, you may have waited just long enough. The system is now set up and running. Home Loan modifications are being approved in greater and greater numbers. The banks have established clear-cut guidelines of the steps needed to get a home loan modification approved. Follow the steps and you have a good chance of reducing your home loan payments for at least five years and maybe for the entire remaining term of your mortgage.

If you know what to say and do.

TIP! Find out if you qualify for a loan modification BEFORE you spend any money.

Should you even waste your time? If you don’t meet some basic minimum qualifications the answer is no. Click the image below and fill out the info in the form. This will tell you if you qualify for a loan modification. It’s free. There is no cost or obligation to find out.

If they tell you that you have a good chance of getting approved, you have a decision to make. Do you want to continue with them or do you want to go it alone. Nobody works for free so expect some type of retainer fee. On the positive side, they already know the steps that must be completed and the way the forms should be filled out.

TIP! One of the first things they will ask you is “How is your credit?”. You probably think it’s wrecked. In reality, payments are not reported as late to the credit bureaus until after you are 30 days late. If you have been making payments and they are only a couple weeks late, your credit is probably still in good shape.

The loan modification companies need to know your credit rating before they can determine the chances of getting a loan modification approved. If you don’t know, they will need to pull a credit bureau report. Since you want to know if you qualify for a loan modification, they will pull a credit report and charge you for it. You can avoid this charge initially by getting a free credit report from one of the many companies that offer them. (Of course if you decide to use a loan modification specialist, they will want to pull their own bureau report to verify it’s authenticity. Do that only after you know you can actually get your loan modified.

Your other choice is to try to get your home loan modification on your own. This is much riskier since you don’t know the rules. On the other hand, no one cares more about saving your home than you. You will probably be more attentive and less things will fall through the cracks if you remain vigilant.

If you should decide to follow this route, get an education. Find a good loan modification course before you get started. Go through it from start to finish several times. Each time you may pick up something different. When you feel comfortable, and only when you feel comfortable, start the process.

Home Modification Loan Program is introduced by the Obama Administration to counter the challenge of current financial uncertainty. This modification in home loan plan is a step to help the homeowner to save their homes by easing the burden of high mortgage interest rate.

There are some conditions which need to be fulfilled by the applicant to get eligibility for this program.

Terms & Conditions of Home Modification Loan Program:

• The applicant must be a US resident only.
• This loan program is applicable on only mortgage loans for residential properties; in other words, income generating properties are not considered for this loan program.
• Income and bank statements are checked before finalizing of applicants to ensure that the applicant is really unable to pay his or her heavy mortgage debt payments to the bank.
• This program is to support those who are going to bankrupt in the near future because of financial weaknesses. The sole purpose of this program is to save the residents of the people.
• This modification loan program is valid for those who got a loan before January 1, 2009.
• The principal mortgage loan amount must not be more than 730,000 dollars — rich or luxury homeowners are not eligible for this.

Benefits of Home Modification Loan Program:

• This loan program modifies the agreed loan conditions by reducing the annual interest rate and increasing the payback period for the borrower.
• This is intended to help the Americans who are not in the position of paying the high rate of mortgage loan payments. So, by this step, poor people can have a home by paying low annual interest rate.
• This program is not to write off the loan amount but to decrease the burden of loan payments and divert the risk of borrower bankruptcy.
• World can never forget the financial depression of 2008, when the mortgage crisis bankrupted many billion-dollar -industries. Obama administration is again facing a risk of financial depression created by Oil hike prices, which created more than 10.5% unemployment rate in the US. So, to counter this issue, this program is introduced to soften the mortgage loan policy. It will help the poor people to save their homes.
• It also secures the financial and investment institutes from being bankrupt. It will help to prevent the economy from financial loss which can be generated by borrower disability to pay back their loans. Moreover, it will keep the cash inflow in these institutes from their borrowers.

Home Modification Loan Program is really a good step by the Obama administration to support the uncertain economic condition of the US. This program was admired by many economists and financial experts. People of America are also expecting such steps from their government which help them to come out in the current situation.

It is the high time to save the country by inviting the government to play its role in securing the future of people. Many economists suggest that the government should introduce more such programs to save the people from poverty and financial depression.

Under recent financial problems, many families are encountering the risks of losing their homes because they cannot afford the heavy balanced bills. In such a tough scenario, everyone is hoping to get benefit from this loan modification plan. In the procedure of loan modification, the bank or lender review the applicant’s current loans. They decrease the insurance rates and fix an interest rate over a specific period of time. This program helps the homeowners to pay their bills in long run. The total amount may be raised but it gives the facility to prolong the payback period with easy installments.

To get this scheme, the applicant has to submit the loan modification forms. After the incident of 2008’s financial crisis, US government has introduced strict mortgage loan policy so that they can avoid any risk of such financial downturn in future. So, it is very important for the borrower to know about these forms because they exhibit borrower’s debt ratio and financial strength. These modification forms are the only way of convincing your lenders to get the approval.

It is quite complicated to fill loan modification forms but it is because the lender requires complete information regarding your bank accounts, current loan payments, requests for new loans and the regularity in their payback. There is a standard guideline called HAMP which is very important to follow while making an application. These standard rules refer to the criteria for a lender to check an individual’s financial worthiness.

There are some handbooks for guidelines of how to fill a properly loan modification form. The Complete Loan Modification Guide is one of the best selling handbooks. It’s easy step by step guideline that helps the applicants to properly fill the form. It addresses some basic questions such as which are the required documents? How to calculate your different financial ratios? How to prepare your bank statement? How much balance do you have in bank account? Moreover, there is software named Loan Mod Quick APP software, which is very helpful to calculate your debt ratio, income statement, financial ratios and chances of being accepted.

Some of the main documents required by the lender are:

1. Cover Letter
2. Bank Statement
3. IRS form 4506
4. Owned properties Registry
5. Hardship Letter
6. Tax return statement
7. W2

It is very important to fill up your loan modification forms because no matter how much deserving applicant you would be, still you have a chance of rejection. So, the maximum you can do at your end is to submit the forms with complete and accurate credit and financial information. Not only this, you also have to present a solid reason of your financial difficulties.

There are a lot of people whose only thought is “How can I save my house”? They bought a little more than they could afford hoping they would be able to grow into the payments. The banks facilitated this idea with adjustable rate mortgages. For a lot of young couples this was a way to enjoy their future dreams today. Who could have predicted a worldwide recession?

Now many people are looking for loan modifications. They thought they would be safe when they took out the loan because if they ever got in trouble, they could always sell their home to avoid foreclosure. Along with a global recession, home values fell as much as 50% in some markets.

Actually the huge number of homes that have gone to foreclosure has helped people in this situation. Banks can’t handle all the foreclosures and for the first time in history, are modifying home loans. This would have never happened in a normal market. The problem was so widespread that the government has allotted funds to help banks absorb the loss they incur when modifying a mortgage.

The program started slowly but now has the kinks worked out and more loan modifications are being approved than ever before. Just as things are getting rolling, the new powers in the House of Representatives have pledged to cut the budget and assistance to banks. If they are successful the number of approved loan modifications will plunge. If you have been hanging on by a thread, the time to act is now.

Banks have their own language. They talk about debt ratios, FICO scores and loan-to-value. If you are familiar with these terms you can probably negotiate the loan modification yourself if you know the right steps, the proper forms to submit and how to fill them out so the lender will be compelled to say yes.

You can greatly increase your chances if you take some kind of home study course prior to starting your mortgage refinance. Hiring a professional to represent you is probably a good move if you feel intimidated by banks. Unfortunately they will not be as motivated as you to modify your home loan because nobody cares more about your home than you.

The mantra of our generation seems to be “Save My House”. How did we get in this situation and how do we get out?

A few short years ago things were great. I had a good job and was sure I would get promoted as I climbed the corporate ladder. Everyone I knew had a great attitude about the future. Today things don’t look so great.

I remember a lady in my office received a beautiful bouquet of flowers delivered to the office. Most people thought it was an anniversary present from her husband. It turned out to a congratulatory gift from her real estate agent. She had just bought a new home. It created a buzz in the office. How could a secretary afford a new home?

I found that real estate was on fire. Her property, a condo, had gone up in value. She sold it and bought a home. If she could do it, so could my family! The lenders were anxious to make loans and offered a loan where the payments would go up each year. This would work for us as I expected to get promotions and raises. The real estate agent explained that even if we ever got in trouble, we should always be able to sell my new home as it would be worth more in the future than it was when I bought it. Makes sense to me. We were able to buy the type of home we hoped we thought we would have to wait 10 years to afford. The difference was we were able to qualify now. We were also worried that the way homes were increasing in price, we would never be able to afford the house later if we didn’t buy now.

Fast forward to today. I didn’t get the promotions I expected due to the recession. That didn’t stop my loan from going up. At first it was doable. We just sacrificed some things we liked to do like going out to dinner. We had planned to take a family vacation but that got cancelled. Instead of buying a new car, we decided to keep our present vehicles which are now close to 10 years old.

When the loan increased again it caused a real dent in our budget. We had planned another baby but that had to be delayed too. We couldn’t afford the increased expenses and we couldn’t afford for my wife to take time off from her job. I took a part time job at a local convenience store to help make ends meet. I have a college education so that was kind of degrading but I had to do what I had to do to support my family.

Finally we decided to sell the house and start over. That’s when the real panic started. Our real estate agent said many people in the neighborhood had either sold their homes or had already defaulted on their loans. The value of our home had fallen about 20%. We owed more than the home was worth. The only way to sell it was to pay off the difference of $40,000. We didn’t have that much money in our bank accounts so we were stuck. The only option was to let the home go to foreclosure and ruin our credit for 10 years.

We looked into a loan modification. This was scary because the newspaper was full of articles about rip-off artists. I called the bank to ask them what to do but they never called back. That was until we became late on our payments. That was when I found that they had changed the qualification process. I didn’t qualify for a fixed rate mortgage, even though the rates were near 5%. They also said that since the value of our home had fallen, we would have to pay the same $40,000 to pay off the old loan and get a new loan that was inline with what our home is now worth. We were stuck.

We didn’t want to let the home go to foreclosure. We’ve had great credit until this thing happened. I’ve always believed it’s important to keep our credit pristine. My rating has already fallen because I’ve been late on a couple of payments but I surely didn’t want something on my record for 10 years.

The only answer was to try to modify the loan myself. I figured I needed to find out how everything I could to learn the loan modification process. I needed to learn the rules. This only makes sense. I wouldn’t try to fix my car if I didn’t know anything about cars. I was trying to fix my home loan so learning how lending works is essential.

Do you want to scream “Save My House please”. There are over a million homes in foreclosure in the United States. You are just one person. How can you get noticed and get your loan modification approved? The answer is right in front of your face.

First, you must stop worrying. It is probably destroying your life. Are you fighting more with your spouse? Are you performing poorly at work because you are not sleeping well? Do you imagine others are losing respect for you? Thinking such things is not going to help you. It will only make things worse.

If you have a clear head, I recommend you do your loan modification yourself. The process is not complicated, although there are many things you’ll want to do to increase your success. This is probably the most important thing there is to consider.

You need to learn the things that should be done and must be done if you are to be successful.

If you are thinking clearly, you can learn the steps to getting a loan modification. Don’t try to figure it out as you go. If you make a mistake, you’ll lose. This is a time for a careful well-planned strategy. You are risking the largest investment you have ever made. In many cases it’s worth hundreds of thousands of dollars. So learn the steps of a successful loan modification first, rehearse them to you know them and then start the negotiations with your bank.

There are many ways you can learn the strategies. You can research and read articles like this one. You can go to blogs and websites that offer free tips. The problem with this approach is you are picking up bits and pieces, not a thought-out procedure. My recommendation is to pick a course to teach you the steps.

Twenty years ago I would have recommended contacting your local community college to see if there are any night classes that address the problem. There is a system called The Learning Annex that offer weekend courses. The reason I would not recommend them today is you must take notes in a class. If you don’t take good notes, you will probably forget something important.

Today I would recommend a video course. The advantage is you can go back and review the course any time or even several times. You can watch hard-to-understand sections over and over again.

I would also recommend a course that has a forum where you can join a community of people who are going through the same thing. Sometimes you will hear about changes to programs here before they are even talked about on the news.

And finally look for a course that gives you a step-by-step schedule so you know exactly what you should do and when.
There are many great courses out there, some for less than $500. Find a good one and save your house.

If you find yourself in this situation there is help. The reason you are losing sleep is uncertainty. You don’t know how things are going to turn out. So the first step is to make a plan. Once you decide on a plan of action, you’ll feel better and your insomnia will go away.

Maybe the best plan is to let the bank take the house. If you decide to fight to save your home, you should work out exactly what needs to be done and how you are going to proceed.

There are a couple of things you should be aware of before you start.

• The bank is not your friend. Most people don’t realize or comprehend that nearly everyone in the banking field works on commission. They DO NOT have your best interests at heart. This is probably how you got into this mess in the first place. You thought you were getting the best advice for the future, the loan officer was thinking about the best way to make money off you.
• Bankers have their own language. If you have little or no financial background you are going to be lost in conversation. You wont know if what they are telling you is true and let’s face it, most people are intimidated by banks. They don’t ask enough questions and many times don’t ask any questions at all. If they like and trust the banker, the sign papers obligating themselves to hundreds of thousands and sometimes millions of dollars over the length of the loan. A simple mistake that amounts to .0125% difference in the interest rate can cost you tens of thousands of dollars.
• Knowledge is power. Banks have very strict guidelines as to what they can and cannot accept. Should you tell them about the extra payments you make that don’t show up on your credit report? Do you even know what is on your credit report? How important is your credit score in getting your loan modified. This shows why you need to learn all you can about loan modifications.

You can do your loan modification yourself. If you feel comfortable discussing debt ratios, credit scores, hardship letters etc, there is no reason you can’t negotiate a loan modification. But again, you’ll need to know what the bank wants to hear to get them to agree.

I would suggest you take some kind of course on loan modifications to learn the ins and outs. There are “tricks” to speed the process to save your house. Some communities offer free seminars to teach you the ropes. Personally I prefer a video course that includes sample forms. The advantage of a video course is you can watch it over and over again if you don’t understand a point. The problem with live seminars is you are at the mercy of you notes. If you don’t take good notes you probably won’t understand what to do.

To read a review of the best loan video loan modification course CLICK HERE.

If you don’t feel confident negotiating your loan modification yourself, there are many companies that will represent you. Initially there was a lot of fraud in this type of service, but the government cracked down so it is now safe.

There is a common misperception that you should never pay for such a service. Do you really think any professional is going to work for free? What kind of reaction would you get from your doctor is you asked him to perform an operation for free and would only pay him if he cured your cancer. It just doesn’t work that way in the real world.

Tip – Shop around. With so many services available, how do you know which best suits your needs. The answer to that is simple. Shop around. When you go to buy a new car, you look at several before making a final decision. Shopping for loan modification help should be no different. Here are some questions you should ask.

1. What are the upfront fees if any?
2. Is this a total fee or just a fee to do the work?
3. Are there any other fees if the loan is modified. (some companies charge a small upfront fee to cover their time and the time of their employees and a fee if they successfully modify your loan.
4. Are there other fees for outside services like credit reports, appraisals, etc?
5. How many modifications did they handles last year? How many were successful? What is the main reason for the failures?
6. Are they licensed? Are they lawyers? Many states now require licensing to perform this service to eliminate fraud. What is your states guidelines?
7. Do you feel comfortable with the person you are talking to? Are they able to answer your questions so you understand? Do you feel like they are hiding something or being dishonest? If you have any reservations, resolve them before you start. If you feel uncomfortable walk away. Sometimes your subconscious picks up something you conscious mind misses. If you have a “funny feeling”, walk away.

Remember these consultants are working for you. You are paying them, you are the boss. Talk to as many as you can to find a consultant you feel comfortable with.

I have provided a link to one of the best loan modification services. Just fill out the form. There is no obligation. They will send you an email with an application for you to review to see if they can help you.

CLICK HERE to read more about the loan modification service

Who else wants to successfully modify their home loan and save their home?

• Are you losing sleep because you might lose your home?
• Have you lost part of your family income due to a layoff or shortened hours?
• Are you feeling tired at work because you can’t concentrate?
• Do you have a history in banking and know how to talk to these people?
• Do you keep putting off asking for loan modification because you think you know the answer already?
• Are you moody? Have you yelled at the person at the bank who was trying to help you?
• Are you going to try to do something to save your home or are you just going to give up?

Thousands of people are getting their
loans modified everyday because

They know the right questions to get the right answers!

Ask the wrong questions – Lose your home

I started as a loan officer nearly 20 years ago. I have a deep understanding of the sub-prime meltdown and the subsequent foreclosures. Let me take a few minutes to explain the banking situation and why it’s so hard to get a loan modified.

After the 9/11 tragedy, the economy almost ground to a halt. In order to get people to buy big ticket items like houses and cars, the Federal Reserve Bank lowered interest rates to the lowest rates in 40 years. Many people refinanced their homes and used the money to upgrade to bigger homes that didn’t cost them any more because interest rates were so low. Real estate values went up but started getting too high. This caused bubble. Some folk reached a little too high and couldn’t make the payments. In fact, so many people lost their homes that market was suddenly full of foreclosures and the price of real estate fell, in some cases nearly 50%.

In many cases, it was not the fault of the borrowers. Many were duped into taking mortgages they didn’t understand. Some thought their payments were fixed but are actually increasing.

This is causing a downward spiral. As more people lose their homes, the values continue to fall. The banks carry these loans on their books at the value of the original loan. Banking rules say they must have assets to back the loans or the bank is considered over extended and should be shut down to protect the people who have their bank accounts there.  This is a big problem because the houses are now worth less than the loans. The banks look over extended if they have to re-appraise the homes that back the loans. Every time a house goes to foreclosure, the bank shows a loss and looks even weaker.

The government gave the banks money to modify these loans. The banks readily took the money but they didn’t use it the way Congress intended. Instead, they just kept it to make their balance sheets appear stronger. As real estate turns the corner and starts going up, the bank gets healthier and can afford to make new loans or modify existing loans. This is why it is taking so long. In the meantime, people are losing their homes because the real estate clock is ticking. Once a notice of default is processed, certain events happen automatically. This is why it is so important to start the loan modification process right away.

If you wait too long, you pass the point of no return and there is nothing that can stop the foreclosure.

Here are several tips that will help your chances of getting your loan modification approved.

Tip #1

Don’t expect the bank to cut the balance owed on the loan.

As long as the loan is being paid, they don’t have to revalue the house to its true value. Their goal is to work out some kind of payment arrangement without changing the value of the loan. Lowering the loan balance would weaken their balance sheets. They are less than motivated to do this. It does happen in extreme cases but most of the time, they just lower the payments hoping you will be able to return to full payments in the future. Your chances are better to change the loan terms than to change the actual loan amount.

Tip #2

Have a good excuse why you can’t make the payments

Regardless of how you got into the loan, you did sign the papers and agree to make the payments. You may have even signed an estimate of your monthly income on the loan application. You now have to show why you can’t make the monthly payments that you previously said you could afford. You promised to pay them back and put up the house as collateral, but the main thing is, you promised to pay them back.

Saying the home value has dropped and now is worth less than the loan…

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