June 16, 2012

Top 10 Loan Mod Tips

By Timothy Stull (http://www.fresh-start.co)

The word “loan modification”  has become a household word since the foreclosure crisis began in 2006.  However, everyone needs to realize that loan modification / loan work outs have been around for hundreds of years.  Any way you look at it, you asking the bank to modify the terms of your original mortgage & recapitalize past due payments.  You need to sell the on the idea that you are a good credit risk for the long run.  Even though the Federal Government has implemented certain standards / rules for loan modifications….many of the “old school” strategies work very well.  Since I have helped 10,000+  folks complete loan modifications, I wanted to share the top 10 tips below.

1.  Always approach the bank before they approach you.  Once they find you, they have already implemented foreclosure strategy.  Coming forward will put you ahead of the game.

2.  Be realistic with your expectations.  The recent era of entitlement is coming to a halt.  You can’t expect the world on a silver platter.

3.  Don’t expect the same deal as your neighbor.  Remember that your case is unique.  Your problems & financial situation is unique as well.

4.  Always submit documents timely.  Never delay any submissions.  Banks are now going through millions of pending foreclosures.  They are trying to figure out who is serious about saving their home and who is not.

5.  Be prepared for a long battle.  You will need to prepare to spend at least 5 hours per week on your case.  Most cases take 3 to 6 months to complete.  Some take longer.

6.  If you are self employed, make sure your profit and loss is tight.  Make sure your bank statements are organized.  Be prepared to argue about your income for 3+ months.

7.  If you consult a non profit organization, do not expect a lot of one on one help.  They will help you organize your finances and expect you to work the case solo.  Remember that they are bombarded with millions of cases.

8.  Have your math calculated tight.  Income v. expenses, LTV ratios ect.  This all needs to be at your fingertips.  Lenders will ask many rounds of questions regarding your financials.

9.  Be prepared with a solid explanation regarding your past due payments…..especially if you are 12 months past due.  All banks think that home owners are hiding money.  The recent public revolution against the banks has spurred this notion by the banks.  You will need to explain (with solid reason) on where all your $$ went.

10.  If you decide to hire professional help ~ DO YOUR HOMEWORK!!  Ask for copies of completed cases.  Ask for client references.  Check online for complaints.  Ask the firm to complete some work and bill later.  Honest & legitimate firms will conduct business this way.  If they ask for large upfront fees ~ RUN FAR AWAY.  Keep an open mind though ~ there are great firms avalaible for hire.

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