What things your Lender is looking?


I get innumerable phone calls as well as emails from very distressed homeowners all day long. They are emotional and of course distressed, but still had not done any homework. Ask them any question about their interest rate, lender’s name and monthly payment, and there answer invariably will be, “I don’t know”? These are simple questions but shockingly most of the homeowners don’t know. Also, if I ask them basic loan questions, they would not know it unless they look at their papers. Again, most of the terms of the loans are not in their first memory. Their rantings are of course unlimited.

I was expecting this to be on their finger tips, but they either put me on hold, or just wants to call me back after finding out. Okay, here is the summary of things one need to know or what should have in their hands when calling me or any of the other licensed Nevada attorneys. Why I says licensed attorneys? Because they have a degree in law and a license from the highest court of the state. Also, most of them carries a malpractice insurance. To them their license and their integrity is the most important thing to preserve which is required for any loan modification or legal work. Please don’t contact any scam artists in this regard, and I had posted earlier how to weed out the good ones from the bad ones. Let me write few points here for refreshing the memory of my readers.

1. Does your caller has a 702 area code?

2. Do they have a local physical address?

3. Are they licensed to practice in the State of Nevada?

4. Do they have an answering machine or staff ready to connect to the licensed attorney. Is he willing to meet you?

5. Again, is he/she easily communicable with you and with your issues.

Now, since I am on the topic, let me add few things which your lender is looking for in order to give you a loan modifications.

1. The first and by far the most important thing for your lender is to decide if they modify your loan: would you be still be paying the modified amount? This is the single most question which is central in the decision making process. Your lender would modify your loan once only. Please remember that your lender does not like to modify this loan in the first place. Please don’t provide him any excuse for saying NO.

2. Do you have a verifiable and documented job, and income? At least two paystubs are very important. If you have the unemployment check or record that would augment your case.

3. Do you suffer from a temporary or permanent hardship? Is this hardship curable? For instance, look for reduction of some of your expenses. Can you cut down on your cell phone? You can knock down that text servicing to cut down some of your bill on cell phone. Can you cut down on some of the cable bill? Maybe it is time to have the basic cable services. Are you little bit frugal in cutting down the utilities? If not before, this is high time now.

4. What kind of payment history you have? If you have been paying regularly, and now been delinquent for the last two months, use it to your advantage. Print out the mortgage sheet, and let your lender knows that you were paying on time prior to the last delinquency.

5. What is your financial assets and liabilities report at this time? For instance, if you can cut down some of the expenses (like cable tv, gasoline, fast food expenses, and of course innumerable coffee junkets from the local Starbuck, how can you still afford that five dollar a cup for java?), can you readjust your income according to your needs? Can you rent one of your room to someone? Can you pool your driving time and mode with someone?

6. Your Latest Bank Statements. Do you do all your transactions through the electronic banking? That is one of the great way to present a documented financial information about yourself and your family.

7. Credit Report. Lastly, I like to tell everyone that your lender would pull out your credit report to find out if you are current on your credit cards but missing your home payments. In their opinion, you can be delinquent on your credit card payments, but should not be behind on your mortgage payments. Personally, I think they are right. Your mortgage payment should be your top priority. Afterall, it is a legal contract between you and your lenders. Unless you have a severe hardship, you should not be getting this help. Unfortunately, most of us needs this help. That is why federal government has announced a bailout plan and helped banks to shore up the liquidity crisis.

I cannot emphasize more than enough the ‘positive cash flow’ financial information a must for your loan modification. By positive cash flow, I mean that you should have more income than expenditure. I know it is difficult, but if you can show that you are cutting down cable tv and cell phone expenses and looking to sublease one of your room to get more money, it would be very helpful to show a positive cash flow. A negative cash flow on your financial information would be very disastrous for your loan modification.

Few more things to add here:
- Get a copy of your tax record ready.
- Any income or wage cut from your employer’s stationary, should be handy and an excellent verifiable document.
-If you are taking classes in the evening, that is an additional good point.
-Has there been an upward revisions of your child support payment?
-Do you travel a lot in your chose profession. Make a detailed note of it.
-Any increase in your medical expenses.

2 Comments

  1. I had gone this path before. Now, you have every right to file your own bankruptcy or do your own modification. But I have heard cases where people had virtually depleted their IRA, Pension Fund for payment of their mortgage payments and now they are declaring bankruptcy. I wish they should have consulted a qualified attorney. All these people could have saved their IRAS and Pension Fund as exemption and still can declare bankruptcy. These are some of the pitfall of not listening to qualified people and saving a very small amount and losing big amount. (like they say penny wise and pound foolish)

  2. Again, your loan may have lots of RESPA and TILA violations, which only an attorney can figure out. Also, your attorney may write a qualified written request. Please don’t ask me what it. This is why we folks went to law school, took a very expensive bar examination and have lots of students loan upon our shoulders.

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