| By definition, a loan modification is a PERMANENT | | | | modification. Form letters are not as effective as an |
| change in your mortgage terms. This should not be | | | | emotional, gut-wrenching illustration of your current |
| confused with "forbearance" which lenders commonly | | | | financial trauma. And the more you can back-up your |
| offer as an option to borrowers requesting that their | | | | story with documentation (such as invoices, police |
| loan be modified. These agreements with the lender, | | | | reports, past check stub compared to current check |
| however, are rarely in writing and at best, a very | | | | stub, etc), the more real your story becomes. Finally |
| temporary and weak solution to a big problem. I liken | | | | - and I would say the MOST vital component needed |
| it to placing a band-aid on a bullet wound. | | | | for a successful loan modification is a: |
| There are 3 components needed to qualify for a loan | | | | BUDGET THAT MAKES SENSE: If your current |
| modification. They are: | | | | budget shows a surplus, the lender will not approve |
| LENDER VIOLATIONS: In almost every set of | | | | your request because your numbers indicate that |
| Adjustable Rate Mortgage (ARM) loan documents, | | | | you have enough income to pay your expenses. On |
| the terms stated on the NOTE conflict with the | | | | the other hand, if your current budget shows a |
| numbers stated on the TRUTH-IN-LENDING | | | | $1,000 deficit and you request a modification that |
| STATEMENT ("TIL"). This is a very serious - although | | | | lowers your payment $900, you will still not get an |
| very common - Federal Violation! This, as well as | | | | approval because you're still suffering a $100 monthly |
| other common violations can act as leverage against | | | | deficit. In general, lenders want to see about $200 |
| the lender to give them motivation to approve your | | | | surplus in your budget after the proposed |
| modification request. If you have a short-term fixed | | | | modification. There is a very slim window in which a |
| (2-, 3- or 5-year fixed) your loan is still considered an | | | | lender will approve a modification - so seeking the |
| ARM. Imagine yourself in a room with all the other | | | | help of an expert, who spends every day dealing |
| people requesting loan modification from your lender. | | | | with these lenders to know and deliver what they |
| If your mortgage is with a major lender, there would | | | | are looking for, is your best bet for a successful |
| be several hundred other people in the room with | | | | modification. Loan modification has become a |
| you. There are usually very few persons processing | | | | necessary evil in today's challenging economy. |
| these requests. So how do you make yourself stand | | | | People who have rarely experienced financial issues |
| out in the crowd? You must give the lender | | | | before, now find themselves in a situation where |
| motivation to listen to YOUR request over the other | | | | cutting expenses is needed for survival. However I |
| hundreds of requests. The best way to do this is to | | | | subscribe to the belief that you attract more of |
| be represented legally; the 2nd best way is to let | | | | what you focus on. So I maintain that a better way |
| your lender know that you're aware that they have | | | | to deal with financial challenge is to focus on making |
| committed Federal Violations against you. Look for a | | | | more money - even if it means doing something |
| law firm that offers "Forensic Audit" as part of their | | | | you've never done before. The old cliche: "If you |
| modification process. Component number 2 is: | | | | keep doing what you're doing, you'll keep getting |
| VIABLE HARDSHIP: The bottom line is that there are | | | | what you're getting" has never been more true. For |
| 2 main hardships that justify loan modification: either | | | | more information on overcoming financial adversity, |
| your income went down or your mortgage payment | | | | you can contact me or visit my wealth creation |
| went (or getting ready to go) up - or a combination | | | | website. The BEST solution to recession-proofing |
| of both. There are also special circumstances that | | | | your life is to create passive income Focus on the |
| qualify for hardship, such as illness or hospitalization of | | | | things you have NOW to be grateful for, and those |
| a family member, etc. The hardship letter that you | | | | thoughts will create a future with many more |
| write to explain your plight is vital to a successful | | | | opportunities to be grateful! |