What is a Mortgage Modification?
It is one of the most quickly changing areas in real estate. It is a complete moving target, but basically, a mortgage modification is a way to lower your mortgage payments by as much as 50% and keep your home. Even better, it’s a way to recapitalize your missed payments, read, to get even and square up without paying the bank that 20 or 30 THOUSAND Dollars that you owe them if you haven’t been paying.
Interest rates of 2% are not uncommon for a period of 5 years before the mortgage rate slowly climbs back up to today’s market rate.
Estimates indicate that nearly a third of America is currently upside down on their mortgage. In other words, they owe more than their house is worth. PEOPLE WILL NOT PAY A $500,000.00 MORTGAGE WHEN THEIR HOUSE IS WORTH $100,000.00. So what does one do? Enter Loan Modification.
A loan modification is quite simply changing the terms of the loan. From a homeowner or property owner’s perspective it makes it easier to pay. From the bank’s perspective, a loan modification keeps the bank from going into default and causing an even bigger loss. Unfortunately, they won’t make that clear, nor will they make it easy.
It only takes a qualifying hardship, the knowledge of intricacies such as consumer income and debt ratios accepted by the Banks (known as DTI) and also knowing the lender in order to determine if you qualify. Once you are qualified by Credit 911, the work begins, then it takes incredible organization (about 10 to 15 separate pieces of supporting evidence need to be gathered) and often recorded telephone calls and some nudging by the State Attorney General or Banking Department to lubricate the process. All this and in approximately 6 to 8 months you will be granted a trial modification, that with some additional oversight will become finalized.
When the process is complete, often even at the trial modification period, the consumer can expect an average savings of 30% on their previous payment. Consumers who have fallen behind on their mortgage in excess of 7 or 8 months can expect a savings on their payment of about 20% and with approval they will avoid having to make any large payment to reinstate their mortgage.
As a struggling homeowner a Modification may be just the thing to save your home but as you can see the process of obtaining a Modification is not a “do-it-yourself” project. Credit 911 has been successfully performing Modifications for nearly 3 years, stay tuned and we will be publishing detailed articles on the programs available and Lender Guidelines.
If you would like to contact Credit 911 please forward a comment, visit www.credit911online.com or call us at 212-993-6255.
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