Making Money Resources

Loan modifications are becoming the saving grace of many homeowners in distress.  With the recent turmoil, and the continued slide in the real estate markets, banks are really starting to step up their efforts to keep homeowners in their homes, making it possible to modify your own loan.  This is a little off topic for what I normally write here, but this is important, and many people are being taken advantage of due to their lack of information.  Do it yourself loan modification is a real option, before you pay thousands to have someone do it for you, do a bit of homework first.

Banks and lenders do not want to foreclose on a home.  It costs them money and time, and they would much rather have a borrower who can afford their mortgage.  With the huge downturn of the real estate market, though, many homeowners have lost options previously available to them.  If you lost your job five years ago and could not make ends meet, you could sell your home and downsize.  If your company transferred you out of state, sell your home and buy a new one.  With one in seven homes in this country underwater (you owe more than your home is worth), those options simply are not there today.

Now you are stuck with the loan you have, the home you have, and oftentimes it seems overwhelming and useless to try and work with the bank.  Don’t feel that way, it can be tedious, but like anything in life worth doing, if you work at it, you can be successful working out a loan modification with your bank or lender.

The first thing to do is actually contact your lender or bank.  Call the customer service phone number on your mortgage statement and ask for the phone number to the loss mitigation department.  The loss mitigation department is who you want to speak with, whether you are looking to short sale your home, ask for a principle reduction or ask for a fixed rate on your loan.  Call them, open a ticket and get the ball rolling.

They will need some paperwork from you in order to get things going.  I suggest putting together a solid game plan before moving forward from here.  Decide what you want.  Do you want a principal reduction, do you just want to sell your home on a short sale, do you want a reduced interest rate.  The options are many, and how you decide to proceed can really have an impact on the outcome of your loan modification request.

There are many loan modification companies out there, attorneys and other groups that will do all this for you.  They typically will charge anywhere from $1,000 to $3500 or more for their services, upfront.  I don’t normally encourage people and clients of mine to go this direction.  You can really do it yourself.  What I do suggest, however, is to get some solid information so you know the process and what to expect.  You can check out this loan modification package that gives you the information you need to get this done yourself.  It is a great package, includes all the forms you will need and is easy to read.  Many of these loan modification companies out there now are new, have just sprung up with the recent turmoil to make a fast buck.  Get the real scoop, pick up the phone and do it yourself.  It’s not hard, and with a little knowledge, you can really get it done yourself.  I should know, I am in the process myself!

Good luck!