"When we found out that our house was worth a lot less than what we paid for it, we were pretty upset. We thought we had made an investment when we purchased our property, but as it turns out, it was a poor investment. We wanted to get out of the house but couldn't even sell it. We thought about just giving it to the bank, but they didn't want it. We had no idea what to do, but then I found out about 1st Foreclosure Prevention. They were able to give us the foreclosure help that we needed and even helped us with the short sale process. We were able to walk away from a bad investment with hardly any damage to our credit thanks to them."
"I was so stressed out in trying to figure out how I was going to stop foreclosure from happening to me that I actually had to see a doctor for stress. I struggled hard to buy my condo and wanted to keep my home and save my home from foreclosure. But it was getting difficult because the mortgage amount kept going up. I had an adjustable rate mortgage and the rate kept rising. On top of that, I lost my job and got behind in payments. I thought that this was it, I was not going to be able to stop foreclosure. Then I found 1st Foreclosure Prevention. They were able to stop foreclosure from happening to me and allow me to keep my condo. I am now all caught up, have a new job and happier than ever thanks to them."
"When we refinanced our home, we didn't think that we would be facing the foreclosure process. But there we were - after 15 years in our home, going through a foreclosure because we couldn't afford to pay the mortgage. We refinanced to get money out to finish the basement, but then I lost my foot in a snowmobile accident. I was laid up for a while and the bills mounted. Then we found that the mortgage payments were actually going up! After 15 years in the same place, it can be really tough. But my wife called 1st Foreclosure Prevention and they helped us out. They gave us free advice on how we could stop foreclosure and what to do. We were able to save our home from foreclosure with their help."
"We didn't want to go through the foreclosure process. We were so embarrassed that we were facing a foreclosure and knew that all our neighbors would find out. A couple down the street had a foreclosure and they posted a sign on the property. It was so embarrassing. But we knew that it was coming. My husband lost his job and we were really struggling to make ends meet. We didn't want to lose our home, but felt we had no choice. We were really ashamed of what happened to us. Then we talked to 1st Foreclosure Prevention and they made us feel so much better. They didn't make us feel ashamed and actually gave us the foreclosure help we needed. Thanks to them, we didn't have to go through the foreclosure process that would have pained the entire family."
"I was going through a divorce and was about to lose the house. I didn't want to keep the house but I didn't want to go through the foreclosure process, either. But I had no idea that there were other options open to me in my state until I contacted 1st Foreclosure Prevention. I talked everything over with a very nice loss mitigation specialist and they gave me a personal and free foreclosure consultation. They were able to actually stop the foreclosure process and I was able to stay in my home until it was sold. After the divorce, I was able to buy a new home for myself and my children."
"The bank was actually selling our house right out from under us! I didn't think it was possible, but we live in a state where the bank can start selling your home if you do not pay your mortgage. So we got a notice that they were selling and didn't know what to do. We weren't even sure we wanted to live there anymore as it was worth a lot less than what we paid for it. But we had no idea about the impact foreclosure has until we learned about it from a friend. We did want to be able to get a fresh start and didn't want a foreclosure haunting us for years to come. So we contacted 1st Foreclosure Prevention and they were able to help us stop foreclosure. They stopped the sale and then helped us sell our house. They really ended up saving us."
Home / Advantages of using third party
Advantages of Using Third Party Assistance When Seeking a Loan Modification
If you’re unable to make the monthly payments to your mortgage loan, you can opt for a loan modification. It will also help you to maintain regular payments to your lender and repair your bad credit.
What is loan modification?
You can negotiate with your lender to make some changes in your existing mortgage terms and conditions, by loan modification. You can lower your outstanding loan amount, lower your interest rate and can even waive off charges towards late payment. You can opt for this method by negotiating with your lenders yourself but, it would be better if you take help of a third party professional, to do negotiation on your behalf. It is better not to do negotiation on your own, as you won’t have that much knowledge to handle the complicated paperwork, lender red tape and legal matters associated with the modification process.
What are the advantages of applying for modification through a third party?
If you think you cannot manage the loan modification process on your own, you can hire a third party loan modification company to do this on your behalf. They will negotiate with your lenders, do all the paperwork, make phone calls, etc, to get you the most suitable and affordable loan modification. Generally, loan modification companies can be of two types: non-attorney-based and attorney-based.
The non-attorney-based companies are registered license holders of the Real Estate Department of each state. They have the authority to collect upfront fees, except in California from October, 2009, since the passing of SB94.
The attorney-based companies are basically the law firms or the companies which have an in-house or outside attorney along with other real estate professionals, to help with the legal analysis with your loan application.
The advantages of hiring attorney-based companies are:
• Practical knowledge: Attorneys are superior to any individual in handling your loan modification because of their practical experience. Arguing, negotiating and settling tough issues are regular parts of their job, so, they do these much well than the others. They will also better understand the terms and conditions written in a contract.
• Approach without emotion: Attorneys will be able to handle the legal proceedings better than you, as they will not get emotionally involved. As you are emotionally involved, you may settle for less in order to save your home from foreclosure. But as the attorneys are accustomed to handle tough situations, they can press for more settlement and succeed. Doing your own loan modification without a third party’s help will be as silly as representing yourself at court without a lawyer.
• Lenders give quick response: Another great advantage the attorneys have over you is that, they can put a great pressure on the lender, as soon as they send a loan modification proposal. So, the response from your lender is also prompt.
• Professional approach: As they are professional, their approach and work would also be more systematic and will know how to get you the best deal. They will have a professional approach in writing your application. So, a clear picture of your financial situation can be given to the lenders, to get your loan modification application approved.
• Less time: Taking professional help will reduce the time to get your loan approved.
• Professional assistance: They will assist you in preparing your loan modification application by helping you to prepare the financial budget, listing your assets and liabilities, preparing your financial statements, etc. They will also provide you with a list of all documents you need, so that, you don’t leave any important docs behind.
• Provide extra help: The attorney-based loan modification companies also have professional who review your financial situation to find out the options you can afford. They will also do an analysis on your home’s current market value.
• Strike a better deal: As they have long term relationship with the lenders, they can do better negotiation on loan modification terms and conditions.
• Offer multiple options: They will work out different plans that the lender may consider, so that if your first option is turned down, you can go for another option for modifying the loan.
• Save you time and energy: The companies have current updated knowledge on real estate, mortgage and lending laws. Other than these, they will also make calls, negotiate with your creditors and keep records of everything, on your behalf. As they will do most of your work, it will save you time and energy.
Are you eligible for loan modification?
Not every borrower can opt for modification of their loan. You need to find out whether or not you are eligible for loan modification. The criteria mentioned below, will help you to know whether or not you can apply for modification of your loan.
• Your loan has to be insured by Freddie Mac or Fannie Mae
• You must be the primary resident of your house, which has a mortgage
• You are unable to qualify for a refinance on your mortgage
• You are in a state of delinquency and nearly going into foreclosure
• Your mortgage payments have become too high
• You’re self employed and passing through a difficult financial situation
• You have an adjustable rate mortgage (ARM) on your current loan
• You do not have any equity on your home
• Your monthly loan payment exceeds 31% of your gross monthly income
• Your loan has to be insured by Freddie Mac or Fannie Mae
• You must be the primary resident of your house, which has a mortgage
• You are unable to qualify for a refinance on your mortgage
• You are in a state of delinquency and nearly going into foreclosure
• Your mortgage payments have become too high
• You’re self employed and passing through a difficult financial situation
• You have an adjustable rate mortgage (ARM) on your current loan
• You do not have any equity on your home
• Your monthly loan payment exceeds 31% of your gross monthly income
What documents do you need for loan modification?
You need to furnish the following documents along with your application for modification of the loan:
• Your financial worksheet
• Your current driver’s license
• Salary stubs of last three months
• Tax returns of last two years
• Property tax statement
• Statement of your bank account
• Mortgage payment coupons/statements
• Details of your payment towards your car loan or student loan
• Details of your monthly payment amount towards your credit card bills
• Your current driver’s license
• Salary stubs of last three months
• Tax returns of last two years
• Property tax statement
• Statement of your bank account
• Mortgage payment coupons/statements
• Details of your payment towards your car loan or student loan
• Details of your monthly payment amount towards your credit card bills
What are the risks of applying for modification on your own?
If you have enough knowledge on loan modification terms and conditions, lending and mortgage laws, you can do negotiation on your own loan modification. However, this self approach has some more disadvantages. These are:
• You may not have that in-depth knowledge of modification and mortgage process, so there will be a chance of not getting the best deal from your lender.
• You may not have the advantage of getting all the benefits of private and government loan modification programs, if you approach on your own, as some special programs are kept for the companies only. You can take advantage of those, only if you apply through an agency.
• It takes a lot of time and energy to do negotiation with your lenders and finalize the modification process. You will need a lot of patience, time and energy throughout the long process.
• You will not understand the legal terms and conditions written in a contract and have the chance of paying more to your lenders.
• You may not have the advantage of getting all the benefits of private and government loan modification programs, if you approach on your own, as some special programs are kept for the companies only. You can take advantage of those, only if you apply through an agency.
• It takes a lot of time and energy to do negotiation with your lenders and finalize the modification process. You will need a lot of patience, time and energy throughout the long process.
• You will not understand the legal terms and conditions written in a contract and have the chance of paying more to your lenders.
What does the market survey say?
Based on a market survey conducted on January, 2010, the total number of application for loan modification was 3,404,501. Out of this number, only 70.4% of applications were found to be eligible for the modification program and the number was 2,396,285. Out of this, only 3.4% of the applications got approved for modification programs and the number was 116,297. The rest are in the midway of processing. 1.14% of the total applications were rejected.
You can go for loan modification on your own or can take help of a third party professional. You have to weigh the pros and cons of each method and decide which method should be most suitable for you.
