subject: Ways To Get A Home Loan Modification. [print this page] There's been a great deal of talk lately -- and a heck of a great deal of misinformation -- floating around about something known as "Loan Modification."
It is not difficult to see why.
Thanks to a bunch of, shall we say, "crooks" within the mortgage industry (and I'm becoming type), somewhere close to 50% of all homeowners within the U.S. are facing some type of financial difficulty in the moment.
Usually that would be bad news. But here's the actual irony of this whole situation, and why it actually functions in our favor for once.
In normal occasions, when there are just a handful of foreclosures every day, banks can absorb that. They can just write those off and go on about their merry way making billions.
But when occasions are bad -- or when occasions are Truly bad like they're now -- not even the banks with their hoarded billions can ride it out.
Let that sink in for a second...
The banks can no longer afford to maintain foreclosing on homes in the rate they're now. The simply CAN'T do it.
Imagine that. They need to talk to us. They need to function with us.
There's that saying I'm sure you're probably familiar with, which is that the Chinese symbol for crisis is truly a combination of two things -- the symbol for "danger" and also the symbol for "opportunity."
Make no mistake -- we're in a crisis right now.
And up until maybe four months ago, we had been focused squarely on the danger side of that equation.
But now, my friends, it's time to take advantage of the "opportunity" this crisis is presenting to us.
And that chance is, for numerous, but NOT ALL, loan modification.
I've never been one to sit on my hands and maintain silent when I see consumers and homeowners becoming steered within the wrong financial direction, so I decided to put together this easy guide on what loan modification is, how it functions, and regardless of whether it's an option that functions for you.
These are the top three questions I've heard asked about loan modification. Hope this helps:
What is loan modification anyway?
Loan modification is exactly what it sounds like -- a way to modify the terms of your loan so that you wind up with payments you can afford.
It is not refinancing. This really is something completely different. In loan modification, somebody functions with your financial institution to cut the interest rate, and sometimes even the principal, down to something that's manageable.
These cuts are frequently dramatic -- 30%-50% in numerous cases.
Can I do a loan modification myself without hiring somebody to do it for me?
Yep. You are able to also represent your self at trial. And you know what they say about the lawyer who represents himself (he has a fool for a client).
I don't mean to make a joke out of this question, simply because I know it's a typical one and I know a great deal of individuals are confused about it.
Honestly, yes, needless to say you can try and represent your self. But I'll tell you from what I've heard on the grapevine, that even seasoned loan modification attorneys get told "NO" by the banks more frequently than not.
The difference is, when you're functioning with a lawyer who understands what he or she is doing, they don't stop there. They go back and ask once again. And once again.
And if the financial institution still won't listen, well, then maybe they begin hinting in the truth that they know where the bodies are buried in all those bad loans (should you get my drift).
Bottom line -- when the banks realize they're dealing with somebody who understands the actual story about this mess, and their culpability in it, they tend to sit up a little bit straighter and be more receptive to functioning out a deal.
Okay, so assuming I want to hire somebody to do this for me, what ought to I look for?
This really is a pretty simple answer -- a guarantee.
You will find a great deal of shady loan modification outfits available right now. An amazing demand coupled with a relative lack of supply basically guarantees you're heading to get a great deal of novices joining the industry.
A great deal of these organizations rely on a "best effort" clause, which means, basically, that they'll make an work to get your financial institution to modify your loan.
As long as they do, they've done their job.
That's TOTAL BS.
I mean believe about it. Here's how a company like this would satisfy their "best effort" deal.
Phony Loan Mod Rep: "Excuse me, Mr. Banker, will you modify Mr. Smith's mortgage?"
Financial institution: "No."
Phony Loan Mod Rep: "Okay, thanks anyway."
Don't fall for this nonsense.
If the company you're looking at doesn't offer a guarantee, then don't go with them. Plain and easy.
One Final Thought
Loan modification has been within the news recently, and some reporters who quite honestly don't know what they're talking about have said it doesn't function.
They base this assumption on the truth that some individuals who have gotten loan modification wound up back in trouble six months later.
What they don't understand is that these loan modifications had been done back when occasions weren't so bad, and when the banks weren't as willing to give as much as they're now.
When loan modification doesn't function it's usually simply because the financial institution just made a token reduction within the payment. They didn't give any actual relief, so needless to say it's not heading to do any good for the homeowner.
But now, with the banks desperate, and with experienced loan modification specialists available, they're becoming more and more successful every day.
