Mortgage Modification Tips – 6 Tips For Negotiating Modification Terms

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Mortgage Modification Tips – 6 Tips For Negotiating Modification Terms

Home Loan Modification is defined as the process where the terms of a home loan are modified outside the original terms of the contract agreed to by the lender and borrower. During this process, interest and principal payments are made till you pay off the mortgage in full and the lender holds the lien till then. Any change to the mortgage terms is considered a modification.

Negotiation

1. Before going for a Home Loan modification, find out the status of your finances and fix an income which you can bring in each month. Know how much you spend on bills and where you can make some cost cutting. Some non-profit counseling services can help you with this and also guide you for a negotiation with your lender.

2. Consult with your lender regarding the Home Loan modification requirements and inform your lender about your situation and how he or she can help you to overcome this.

3. Be ready with an answer against the lenders inquiries about your ability to repay the loan. It is better to submit an initial proposal to your lender.

4. Ask the lender for forbearance or to postpone payments for a couple of months until you recover your financial problems in case you encounter some dire circumstances in the future.

5. In case you possess an adjustable rate mortgage (ARM) with higher monthly payments, ask your lender to switch your mortgage to a fixed rate mortgage and assure him or her about your ability to pay a fixed rate mortgage.

6. Documents required by the bank are: a letter documenting and explaining your hardship, proof of current income and capability to make modified loan payment, detailed monthly expense report or budget, etc.,

Benefits

The process of Home Loan Modification itself is designed to get the maximum benefits to borrowers and a few of them are as follows:

a) Status-quo on credit rating- this process does no harm to you.

b) You can avoid foreclosure and you are free to sell the home later

c) Terms of the home loan are easily modified to work within borrower’s financial means.

d) Families are relaxed as they can stay in their homes with peace of mind and without fear of losing their home.

Home Loan Modifications are a must for those who have big debt, expect foreclosure at any time, or are in fear of losing their home. Hence, this program will be a blessing to any borrower who is struggling to make their monthly payments and constrained to lead a life of hardship in view of accelerating expenses and economic downturn.

By: Jason Witts

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What Are Your Foreclosure Rights?

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What Are Your Foreclosure Rights?

If you are going to fight the foreclosure of your home, you need to know what your foreclosure rights are and how to use them to your best advantage. This means getting educated and if you want to save your home, it means getting educated quickly.

The first thing you need to know is that every state has different foreclosure laws. There is not one universal law that governs all states. What this means is that you need to research the laws for your state to figure out what they are. Because whatever those laws are, that is what governs your foreclosure rights.

A good place to start looking to find out what your foreclosure rights are is the website for your state. Doing a search for foreclosure should point you in the right direction. That should at least give you some information and hopefully a phone number to call. I know that in Colorado, there is a free foreclosure hotline that offers free assistance. Because of the current foreclosure crisis in the U.S., many states are now offering all kinds of different free assistance to homeowners to help them understand their foreclosure rights and stop the foreclosure of their homes.

Another good place to look to understand your foreclosure rights is an attorney. I know that it can be difficult or even impossible to afford an attorney when you are facing foreclosure but there are resources out there that can help. If your income is low enough, you might be able to qualify for free help from an attorney or you may be able to find an attorney that would take on your situation pro bono (for free). You will never find out unless you do a little digging and unless you ask an attorney if they are willing to help you.

Doing some research on the internet can also help you understand your foreclosure rights. Sit down with the documents that your mortgage company’s lawyers have sent you and look up every word or phrase that you do not understand. That is what I did and it helped me get a better idea of what I was dealing with. My one warning here is that be careful who you listen to. There are plenty of people out there who try to take advantage of people who are in the middle of foreclosure. Look at more than one website to get your information. It gives you different perspectives as well as giving you a better idea of whether or not it is actually credible, good information.

By: Jill B

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What Are Your Rights During a Foreclosure?

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So many people believe that once they receive the letter from their mortgage company that the home has entered the foreclosure process, they have to leave. This is the absolute last thing you want to do. Even though the foreclosure process has begun, you are still the legal owner of the home and it will remain that way until you sell it or it becomes sold through a foreclosure auction. Why leave the house unless you have to, especially if you would like to keep it.

If you do want to keep the house, you want to make sure that you are looking through all of the options that are available to you out there. The more you research, the more you will find that there are so many ways you can get the funding you need to save your home. Even your mortgage company may have a few options for you to look into. Many mortgage companies can offer their borrowers repayment plans, loan modifications or maybe even a refinance.

Speaking of refinance, you can still go out to other lenders to seek financial assistance from them. You can refinance your home with another lender, which will automatically stop the foreclosure proceedings. Some people are told that they do not have this option while the home is in foreclosure but you do. You can even sell the home if you like.

Another thing that you want to research is whether or not there is a redemption period for foreclosed homes in your state. If you are expecting a large sum of money that is enough to completely pay off the mortgage or your refinance is running a little behind, you may be able to pay off the loan and retain all rights to the home, even after the foreclosure sale. This is because of what is called a redemption period. This is a certain amount of time that the borrower has after the foreclosure sale to "make good" and pay off the loan. During this time, as the homeowner, you should still have full rights to remain in the home. For specifics on the laws in your state, you will want to consult an attorney.

You also have the right as the homeowner to not be harassed by collection calls. Sure, you are past due with your mortgage payments but that does not mean that you have waived your right to be treated with respect. Understand that there are certain laws that protect you. The mortgage company is not allowed to leave twenty messages on your answering machine in one day. They also are not allowed to name call or threaten you with action that they have no intention on taking. In addition, they cannot call you before eight in the morning or after nine at night. If your mortgage company is doing any of these things, you will want to consult an attorney.

Make sure that you are taking a stand as the homeowner. It is not like you are the first person to run into financial difficulty. Find out what all of your rights are and make sure that you exercise them.

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