The factors they will look at are:
1. Nature of Hardship Causing Your Mortgage Problems?
2. What is Your Ability to pay?
3. How Much Amount Owed on your Property?
4. Is There Any Equity in the Property?
5. Are You Currently Employed and What is Your Future Financial Situation?
6. Balancing? To foreclose or pursue a loan workout with you or modify your loan. Answer: Simple Commonsense. The Banks Does Not Want Your Property.
A loan workout or loan modification generally occurs where the parties to a problem loan mutually agree to workout the problem by creating new and better loan terms. The hope is that the new loan will enable the borrower to meet new obligations more comfortably and without any delinquency. A loan modification may consist of new terms, new interest, new period, and all the APR. Under the new Housing Assistance Act, the seond trust deed on your home can be forgiven. We are talking of lots of saving here. As a caution, please do not blow up this last chance to save money and your home.
When applying for a loan modification, make a game plan on how exactly you are going to approach them. These people are trained in minimizing loss for their company and they get paid to by getting the most amount of money out of you as possible or declare that your case is un workable and foreclose on you. That is how they mitigate loss. If you understand this, then you’ll know that you have to approach them and all conversations very carefully.Everything can and will be used against you.
Your lender has very experienced employees who talk with delinquent borrowers. They talk all day and that is what they do, and they are good in that. The first is the collections department, which consists of people who try to collect money out of you and get you current on the payments.
The second group consists of the loss mitigation specialists. These departments go by different names, depending on the servicer, including foreclosure prevention, loan resolution and delinquency customer service.We’ll use the most common name for the department: loss mitigation. It can be difficult to get through to the loss mitigation department if collection agents are discouraged from transferring calls. This is one of the benefits of having a helper, such as an attorney. The first will intimidate bill collectors and the second might have contacts within the loss mitigation department.
Once you get a live person, you want to be working your way up to a decision maker. This is sometimes harder to do for a homeowner than a 3rd party. Often with the homeowner they get stonewalled at the first level, and sadly the first tier in Loss Mitigation is really a glorified collections department. They are paid hourly employee’s who have very little if not zero motivation to go the extra mile and help you get some needed comfort and relief while resolving your problem. Sometimes to get to this point you have to put up with the hourly employee’s through a process of filling out their forms and information. Providing them with items such as pay stubs, tax returns and a whole host of financial information. Once everything is provided, then some lenders will assign the file to someone higher up in the loss mitigation department.
The MOST crucial element to this whole process is your budget and make sure your due diligence is done before hand. They will ask you for a detailed list of your monthly expenses. Make sure you write in a statistical form. If it’s too tight, you may not get approved, if you have too much extra income you are going to have an outrageous payment plan. Don’t agree to it!