By: Anna Cuevas; A Loan Mod Guru
Are you facing foreclosure? Is the whole process keeping you awake all night with fear, anxiety and stress? Nothing is worth affecting your health and inner peace. My goal is to help you sleep better tonight knowing that free loan modification assistance is a post away.
There are a few characteristics you must have to be eligible for this plan –
- The first mortgage loan amount must be at or under $729,500
- You must have taken out your loan prior to Jan 1, 2009
- You must have a verifiable hardship
- The property must be owner occupied
- Property must be between 1 and 4 units
Next you need to know exactly how much your total PreTax (gross) income is- they will use a percentage of 31% that will be the basis of your NEW MODIFIED PAYMENT including mortgage payment for your first loan only, property taxes, homeowners insurance, and Homeowners Association dues – The total MODIFIED mortgage payment CANNOT exceed 31% of your gross income.
- To arrive at the modified payment the first step will be for your lender to extend the term of your mortgage to 40 years in order to lower the payment – if this is not enough to get your payment to 31% then:
- They may lower your rate down to: as low as 2% start rate (usually for 5 years) if this is not enough the last step will be to then:
- At the lenders discretion they may (only a very low percentage of lenders will do this, do not have high expectations of this because most likely you will be let down) the lender may defer some of the balance and not charge interest on a portion of the balance, payable when you refinance, at the end of the term of the mortgage, or upon sale or refinance. If your maximum payment did not get to 31% of your gross income using step 1 and 2 and your lender does not subscribe to deferring principle then your HAMP loan modification request can possibly qualify for another internal program, or denied, if denied then you need to increase your income, try to lower your insurance and property taxes, if possible and then reapply and let your lender know you have new information to submit. Keep your timeline in mind at all times and don’t forget to write down names, departments, and dates.
Keep this example in mind – let’s say your gross income is $2000 per month x 31% is $660 – if your homeowners insurance and taxes are $500 your lender is NOT going to give you a $160 payment to arrive at the $660 maximum total modified payment- so it is important to be realistic and work out your numbers. Work on finding opportunities to increase your income if it is too low to qualify or you if you have been denied – Ask questions and get the exact detailed numbers they used and the reason for your denial. This way you can reapply when you can increase your income.
They do not use your expenses or credit card debt into these figures (called ratios) but if you carry a large credit debt load you will be referred to credit counseling- I would also suggest debt settlement if you are already late on your other bills as well.
My advice is to please be prepared to be patient, yet commit to a positive mindset and commit to not give up and make the calls, take the action, and do the work if you are going to do this yourself you need to be your own advocate and provide yourself with first class customer service. This means get yourself organized and go above and beyond even if it takes a few no’s to get to the yes. Analyze your financial situation, make the necessary cutbacks, make a commitment to give this your all and that means to work on your mindset and remain as calm as possible so you can be successful at modifying your own mortgage loan.
With Faith, persistence, conviction, and determination anything is possible – Don’t give up. Short Sale is not your only option.
FREE Mortgage Loan Modification Assistance on How to Modify My Loan & Save My Home here:
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Do you know if your loan’s investor is Fannie Mae or Freddie Mac? Many lenders have HAMP like guidelines for other in-house programs so do not fear if your loan is not owned by Fannie Mae or Freddie Mac.
To look up your loan visit http://www.myhomeremedy.com/contact.html
The worst thing you can do is to do nothing.
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