How You Can Prevent Delays in the Mortgage Loan Modification Process

A mortgage loan modification is when the lender reworks the terms of your existing home loan to make the monthly payments more affordable. Lenders will lower the interest rate, extend the terms of the loan, reduce the principal (although rare) or a combination of any of the above to get the payment down. 

 A mortgage loan modification may tarnish your credit a bit, but it’s a whole lot better than losing your home and dealing with the ensuing fallout of a foreclosure.  However, as more and more financially distressed homeowners seek out loan modifications to avoid foreclosure, not all lenders have the staff or where-with-all to handle the load.

Consequently, loan modifications can drag out for months. On average it takes approximately 40 to 50 hours of ‘grunt work’ and ‘wait time’ to get through the mortgage loan modification process from start to completion and a lot of that time is spent listening to ‘muzac’ while on hold with your lender!

Avoiding Mortgage Loan Modification Delays 

Here are a few things to keep in mind that can expedite the loan modification process:  

When making initial contact with your lender over the phone, be prudent about disclosing your economic condition. Be honest and don’t embellish or understate you financial situation. It’s best to get the application and paperwork from your lender and ‘submit everything in writing.’  Next, insist that your lender produce the original note (with your signature) that proves you actually owe them the loan.

Everything should be recorded and kept in a file including all transactions, any receipts for those transactions and all conversations with your lender. Keeping good records and making copies of original documents will help avoid any unnecessary delays in the loan modification process.

Most lenders have their own proprietary financial forms. However, if you take the time to prepare your personal financial statement ahead of time, you’ll have all the information ready for your lender. Lack of preparation on your part can slow down the loan modification process if your lender has to spend time calling you for missing information.   

Worksheet Information

The information you will need to be provide in a worksheet should include:

• Current income including ‘other income’ such as child support, welfare etc.
• Total assets including bank accounts (checking and savings), investments, real estate, IRAs, 401(k), stocks, bonds, etc.  
• Total liabilities such as your monthly bills, any tax liens, existing loans and/or medical expenses.

You’ll want to keep good records of all supporting documents, including bills and receipts, with your financial statement in case you are required to back up your statement with proof.  

Waiting to find out if you’ve been approved for a loan modification can seem like an eternity.  But, if you do your part, your chances of achieving a positive outcome, in the time you need it to happen, will greatly improve.

Charlotte NC Avoid Foreclosure Expert

Leigh Brown is a Certified Distressed Property Expert® (CDPE) and the leading avoid foreclosure expert in the Charlotte metro area. 

If you or someone you care about is facing possible foreclosure on their home or investment property, you owe it to yourself to enlist the expertise of Certified Distressed Property Expert® Leigh Brown.

With Leigh Brown on your team, you have the most qualified avoid foreclosure help available!  Leigh can be reached by filling out her online contact form , or give her a call at (704) 688-5005 or toll free at (866) 440-7136.

Leigh Brown can help!

Sources:
RealtyTimes
Trulia