Loan Modifications

The Elusive Loan Modifications

Hi, I’m Nevada Foreclosure Consultant Damian Falcone.  This is part one of the Loan Modifications video series.

In this series we’ll be talking about the elusive Loan Modifications:  what you need to prepare; who you need to correspond with; and the added details that can be the difference between receiving one of the possible loan modifications and having to find another solution.

This is part 1 and we will focus on your preliminary approach to loan modifications. In Part 2 we will talk about the documents you need to prepare and how to handle your initial conversations. This is Get Modified! Your source for loan modification and foreclosure prevention information. As always, for even more information, go to www.falconcreditmanagement.com

Loan Modifications are like most other things you would like to achieve.  You need to understand them, establish your goals, make a plan for achieving those goals and put in the time and effort to effectively complete the process.

Your mortgage servicer will be processing most if not all of your Loan modification information. Your “Servicer” is the entity that you receive your monthly mortgage bill from.  They are looking at your loan modification as a “loss mitigation strategy” And if you haven’t watched our series on Loss Mitigation this means the bank is at risk of losing money on your mortgage – or maybe already started losing and is willing to consider loan modifications, as well as, other work-out options to limit their loss.  Part of the bank’s evaluation is done based on their own financial situation, appetite for risk, current real estate or mortgage market conditions, and the legislative climate.  The other half of their evaluation has to do with You and how you appear as a borrower.

Evaluations of  “borrowers” typically focus on credit-worthiness or perceived risk to the bank – And Financial Hardship (similar to if you were going to lend someone money).  Almost anything can be used to evaluate credit-worthiness or potential risk (which is discussed in more detail in our credit reporting series) but we can sum it up by saying whenever you have any dealings with the bank it is important to put your best foot forward.

These techniques will take more time but if you have the time available loan modifications may require – you do everything you can/as soon as you can to get the bank what they want, when they want it and how they want it.  Some of the things you can do to make it easier on your Servicer are: type all of your documentation (even if it means retyping their documents); Provide everything that is necessary in a timely manner; follow-up when and how they have instructed you to follow up – which could be by phone, email, fax, certified mail and on a specified date – or if they don’t specify a date or time, ask and be sure to follow-up then.

Banks are expecting to approve At Least millions of loan modification applications a year for the next few years and it is safe to assume they aren’t going to approve every application they receive so I recommend making it as easy as possible for the bank to process and approve your application.

These were the key items in understanding your approach to loan modifications.  In the next episode we will discuss preparation of the Financial documentation.

I’m Damian Falcone and this is Get Modified.