Q. Do I need good credit”
A. Loan Modification approval is not driven by credit score. Loan Modification is not applying for new financing. It is restructuring your existing loan with your current lender.

Q. Do I need to be in foreclosure”
A. Being late or in foreclosure may move your file to the top of the pile but having late payments or being in foreclosure are not requirements for loan modification approval.

Q. Do I need to be good with computers”
A. Anyone that has purchased real estate can easily work with
LoanMod Creator. LoanMod Creator, per lender guidelines, underwrites and calculates all qualifying ratios for you automatically. Once you have completed the data entry, a lender conforming loan modification proposal containing every necessary document, form and letter is ready to print and submit to your lender. The entire process takes under 1 hour.

Q. What fees can a lender incorporate in a loan modification?
A. According to Mortgage Letter 2008-21 a lender can combine legal fees and related foreclosure costs for work actually completed and applicable to the current default episode in the modified principal balance .

Q. Am I obliged to allow my lender to perform an interior inspection of my home?
A. Yes. The lender has every right to request an inspection of the property as any damages or changes that could adversely affect the borrower’s capacity to repay their loan must be taken into consideration.

Q. Is my lender allowed to include late fees in my loan modification?
A. No. According to Mortgage Letter 2008-21 the lender should waive all late fees at the time of loan modification.

Q. Can I still qualify for a loan modification if I am unemployed, but my spouse is working but not on the original loan?
A. The lender can very possibly entertain this scenario. The lender will have to conduct a financial review of your total household income and expenses. It will determine whether your spouse’s income is enough to cover the lower loan payment, but not enough to pay back what is already owed. Following this appraisal, the lender will have to consult with their legal team to find out if the mortgage is eligible for a Loan Modification despite the spouse not being part of the original agreement.

Q. How long will it take to get a loan modified?
A. From the time you fill out your paperwork, it can take anywhere between a few days to several months depending on the state of completion of your package, your eligibility and the details of your case.

Q. How much does it cost to hire a professional to fill out my loan modification application?
A. If you want to hire a professional to put together you home loan modification package be prepared to pay anywhere from $1,200 to $10,000. Generally the going rate is one month’s mortgage payment.

Q. Is it ever too late to begin the home loan modification process?
A. Well, generally the earlier you start from when you realize you can no longer meet your monthly payment the better. It is preferable to not let yourself be one step away from foreclosure. However, as long as the foreclosure sale has not occurred, there is still hope.

Q. What should I do if I find out that I cannot afford to keep my home, even with a lower interest rate and lower monthly payments, in other words, I do not qualify for a loan modification?
A. In such a situation, there are several options open to you:

1. BK7- As long as you can meet certain income guidelines, and then the BK will permit you to discharge most of your unsecured debt. You may also be able to protect the equity in your home within limits. The limits differ according to state and your family’s status.
2. BK13- It sets out a repayment plan over 3-5 years for all or a portion of your unsecured debt. These plans often include resolutions of foreclosures since they also provide a way to help you remit past due mortgage payments. Naturally, there are limits to what is permissible in secured and unsecured debt.
3. Forbearance- In this option lender will not foreclose on your home as long as you agree to continue making payments on a reduced total. Although your monthly payments are likely to remain high, your lender will not foreclose as long as you are able to continue paying.
4. Short Sale/ Short Payoff- Instead of foreclosing the lender agrees to let your home be sold for less than what is owed on the mortgage. The bank will not make money with this option, but they will not lose as much as if the property were foreclosed.
5. Hard Money Loan- A loan based on the equity of your property.
6. Cash For Keys – A process whereby the bank pays you to move.

Q. What is an “Acceleration Clause”?
A. When you become delinquent on your mortgage, a lender has the prerogative of demanding that you immediately pay the outstanding balance on your home loan in one shot.
 
Q. Can filing for bankruptcy save my home?
A. Not really. According to the American Bar Association 96% of homeowners who file for bankruptcy have their home foreclosed anyhow. For some people bankruptcy is a viable option, but remember that if you do, you will have both a bankruptcy and a foreclosure on your credit report.
 
Q. Which states use Deeds of Trust and which states use Mortgages?
A. Deeds of Trust: Alaska, Arizona, California, District of Columbia, Georgia, Mississippi, Missouri, Nevada, North Carolina, and Virginia Mortgages: Alabama, Arkansas, Connecticut, Delaware, Florida, Hawaii, Indiana, Kansas, Kentucky, Louisiana, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, Pennsylvania, Rhode Island, South Carolina, South Dakota, Vermont, and Wisconsin. Alabama, Arkansas, Connecticut, Delaware, Florida, Hawaii, Indiana, Kansas, Kentucky, Louisiana, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, Pennsylvania, Rhode Island, South Carolina, South Dakota, Vermont, and Wisconsin.

Both: Colorado, Idaho, Illinois, Iowa, Maryland, Montana, Nebraska, Oklahoma, Oregon, Tennessee, Texas, Utah, Wyoming, Washington, and West Virginia.