Loan Modification Information, Part 1
To remedy this, I’ve listed a few commonly asked questions about loan modifications and loan modification attorneys below. Hopefully, this can give borrowers looking for loan modification help a general idea of what they are dealing with and how they should go about it. Keep in mind that while HAMP’s guidelines are set, individual banks have their own methods of approving loan modifications and so there are many variables. The answers below are by no means all encompassing and for specific information regarding your personal loan modification I can only advise contacting your loan servicer and attorney. 1. Will making payments on my late mortgage affect my ability to qualify for a loan modification? No, if you make your late payments it will not disqualify you from a loan modification. Also, purposefully falling behind on your payments will not increase the chances of success for your loan mod. HAMP guidelines state that anyone behind or in danger of falling behind on their loan payments can qualify for the program. If you are current on your loan but will not be able to make payments soon because of unemployment or a rise in your interest rate, you fall under the HAMP guidelines. 2. How long do I have before my house is sold at a foreclosure sale/auction? This differs depending on state law, but in California after 60 days late the Lender will issue a Notice of Intent to Accelerate. This notice gives the borrower 30 days to come current on the loan or additional steps will be taken. After the NoI, the Lender will file the Notice of Default. In California, the Lender must wait 3 months after the NoD filing before filing a Notice of Trustee Sale (NTUS). After the NTUS is filed, the sale date of the property can take place no sooner than 14 days after the NTUS filing date. Basically, in California you have around 4 ½ months after receiving the Notice of Intent to work something out with your Lender. 3. What happens if my loan modification is declined? Will my lender allow me to get current on payments and keep my house? In California, you have up until 5 days before the foreclosure auction date of your home to come current on your payments. Keep in mind this includes all late fees, penalties and expenses incurred by the bank during the foreclosure process in order to be considered current by them. 4. Will my Lender accept late payments from me and move all late fees, past payments and penalties to the back end of my loan? The only way a bank will do this for you is if you get a loan modification. HAMP guidelines require banks to roll all missed payments onto the back end of the loan, and all penalties incurred from missed payments will be waived. 5. What is the difference between a trial loan modification and a permanent modification? This is a big source of confusion and major misconceptions about loan modifications, and for good reason. Under federal loan modification program guidelines, banks are required to place anyone applying for a loan modification through HAMP to be placed into a three month trial loan modification. This is a period in which the bank lowers the borrower’s payment to an estimate of what their permanent payment will be in order to see if the borrower can keep current with a new modified loan. If the borrower misses one of these payments, they will be disqualified from a permanent modification. It is important to note that even if a borrower makes it through the trial modification period, the banks are not obligated to approve a permanent modification, and they are not required to disclose why the permanent modification has been denied. A permanent loan modification comes after the three month trial period, and can lower the interest rate on a mortgage, change the rate from adjustable to fixed, move missed payments to the back end of the loan, extend the life of the loan so monthly payments go down, or even reduce the principle balance on the mortgage. Overall, the HAMP guidelines are shooting for reducing the mortgage payments to around 31% of the gross monthly income of the household. This doesn’t mean all loan modifications will wind up at 31%, but it’s a decent indicator of where your payment will end up. About Author We at American Loan and Mitigation Specialists are dedicated to bringing home owners the very best service when it comes to their loan modifications. We know this process can be extremely stressful and difficult to go through. Our representatives are with you every step of the way providing updates, counseling and information regarding loan modifications. If you have any questions about loan modifications, don't hesitate to visit us at www.callalms.com today and browse our wealth of information on loan modifications or get in contact with one of our agents! Disclaimer: Article submitters are solely responsible for the content of their articles. ArtiLib can't be held liable for the contents of the articles. Report Abuse | Browse By Category |
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