Posted: 3/22/2009 11:13:13 PM EDT
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I need to get some advise on inquiring about a loan modification.
My wife lost her job last year, so we were a one income family for about 8 months till last month. The wife got a new job about 3 weeks ago, but its at less than half the salary she used to have I have been able to work extra hours and shifts to make up most of the difference, but I can't pull that off for forever. So I'm considering asking my mortgage company for a modification to get my interest rate lowered. Does this make any sense? I know a refinance would do the same thing, but our credit scores were negatively affected with the loss of income coming suddenly, so now I doubt we would qualify for a straight refinance. I have heard that you can get rates as low as 3% in a modification, which would help me tremendously in lowering my payments. (I currently pay 7.25%) Can anyone give me advise as to 1) How to approach my lender and convince them I would be a prime candidate for this type of modification (I have had late payments this past year, but I've not been more that 1 month behind) and 2) Is there any unseen risks in a loan modification I am unaware of? Thanks! |
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Quoted:
I need to get some advise on inquiring about a loan modification. My wife lost her job last year, so we were a one income family for about 8 months till last month. The wife got a new job about 3 weeks ago, but its at less than half the salary she used to have I have been able to work extra hours and shifts to make up most of the difference, but I can't pull that off for forever. So I'm considering asking my mortgage company for a modification to get my interest rate lowered. Does this make any sense? I know a refinance would do the same thing, but our credit scores were negatively affected with the loss of income coming suddenly, so now I doubt we would qualify for a straight refinance. I have heard that you can get rates as low as 3% in a modification, which would help me tremendously in lowering my payments. (I currently pay 7.25%) Can anyone give me advise as to 1) How to approach my lender and convince them I would be a prime candidate for this type of modification (I have had late payments this past year, but I've not been more that 1 month behind) and 2) Is there any unseen risks in a loan modification I am unaware of? Thanks! Ask them - the One has introduced a plan to limit home mortgage payments to no more than 31% of gross (I think). Worst they can say is no. Also you may stretch it over 40 instead of 30 which may help and you can always make more house payments than required. Watch out for early payment penalties and things like that before you sign. Talk to them - they have enough houses and prefer cash. |
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Go with a 3rd party company. Its not in your banks best interest to reduce there profits or they will just turn you down. It will cost more but you get a much better reduction. email this person, she will get it pre approved for you before you spend the cash. [email protected]
Also, you can try Fannie. Info is on there website. there suppose to be doing it for free. Only if your debt to income ratio is 38% or lower. Which blows me away, why would you need a loan mod if your debt to income is less than 38%??? Obamanomics?? |
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I would look seriously at this website before I talked to any third party company. http://www.makinghomeaffordable.gov/. This is the government plan that just passed and this will give you the accurate information you need.
I don't know how the laws are written where you are located but in Nevada it is illegal for loan modification companies to take upfront fees ( I know that it is illegal in CA too unless the company is DRE approved). It is also illegal in NV for ANY company to operate as a debt settlement company unless they are registered with the Consumer Affairs Division. To date, not one mod company is registered. That does not stop them, however, from soliciting homeowners in this state. Keep in mind that most of the people I know in the mod business are ex-subprime originators and if it's not mods they are pushing then it is some type of MLM scam or timeshares or something of that nature (I am in the mortgage business so I get solicited by mod companies to become an affiliate often). Also keep in mind that it is illegal for an attorney to pay referral fees to a "affiliate", so many companies get around this by "processing" your modification for a fee, many times ranging from $1500-$3000. All that being said, if you can find a reputable modification firm (please do some serious due diligence, many firms are under investigation and people are being indicted for taking the money and running) and you feel that it is in your best interest to have someone negotiatiing on your behalf then you do what is right for you. |