Loan Modification. It's Childs Play

Loan Modification Process Made Easy

Loan modification sounds intimidating to the average homeowner but the process is indeed simpler than you might think. We have tried to break it down in simple terms so you can better understand the process. Ultimately, a successful loan modification requires an agreement between the homeowner and the lender on the new terms of the loan causing both parties to become better off after the transaction. Below are what is required for each party.

For The Homeowner

Three elements must exist to make a homeowner a good candiate for loan modification:

1. Desire to Keep the House
2. Experienced a Financial Hardship
3. Income/Employment - Able to continue making lower payments
   

For The Lender/Servicer

Lenders and mortgage servicers each have their own loss mitigation departments and policies, but what is clear is that no lender wants yet another house to enter foreclosure, specially with all of the recent government incentives and assistance. As such, given foreslosure the alternative, as long as the homeowner can still make payments on the loan, the lender would be willing to work with him/her to prevent a foreclosure. Typically, lenders' requirements are to make sure that the deal makes fiscal sense. For example, they must determine that the revenue lost in lower payments on the loan would still be better than the cost assosicated with the foreclosure and maintenance of the home after it is taken back to the bank. In certain situations, this really gets down to bad vs. worse for the lender, but as a general rule, it is always better to let the homeowner keep his/her home and not take the house back. Obviously, the bank is not going to do something that is not in the best interests of the bank. Sometimes, it makes more sense to foreclose on the house. A good example of this is a borrower who would still be unable to pay a reduced mortgage payment due to a reduction of income or loss of job. In this situation, the bank realizes that they are not going to get paid since the borrower is not making enough money to cover the mortgage payment and other living expenses.

Forensic Loan Audit

Many loans funded during the "boom" years of 2002-2006 contain significant State and Federal violations resulting from carelessness, greed or just innocent oversight by the lender and/or broker. Regardless as to why these violations were performed by the lender, these violations carry EXTREMELY stiff financial penalties for the lender, and can result in serious legal consequences to the lender, such as forcing the lender to refund all interest paid to date back to the borrower, reducing principal balances and foregoing monthly mortgage payments. For example, let's say that over the last 2 years, you paid $25,000 in interest on your loan that contained Federal or State Violations. The lender could be required to pay you back $25,000!

Loans with illegal terms or conditions are not enforceable by the lenders. Foreclosures resulting from illegal loans are also not enforceable. The foreclosure process is stopped when litigation on a questionable loan begins. Mortgage payments are NOT required during the foreclosure or litigation process, although depositing the mortgage payment into a separate bank account is often recommended.

The Only Way To Know If Your Loan Contains VIOLATIONS is With a Forensic Mortgage Loan Audit.

A Forensic Mortgage Loan Audit is performed by an our attorney and a team of legal experts. The audit is basically an extensive and thorough examination of your loan documents that you signed when you first got your mortgage loan. These legal experts examine your loan documents for violations of State and Federal laws. Once your audit is complete, we present to you a written report, outlining all the violations, if any.

Understand this fact, before you can effectively get your lender to modify your loan, YOU MUST KNOW WHAT VIOLATIONS WHERE PERFORMED BY THE LENDER.

This is the key to obtaining a favorable outcome during the Loan Modification process. The factual and legal leverage you will get from a Forensic Mortgage Loan Audit will give you the best chance to get your loan modified.

To a large extent, these violations are the LEVERAGE used to argue your case against your lender. Generally, the more violations, and the higher their severity, the better chance you have of obtaining a loan modification.

After performing a thorough assessment of your personal finances and analyzing the original paperwork, legal documentation and disclosures associated with the loan, the Forensic Loan Audit will document what laws were broken by the lender and/or broker during the loan process. The Forensic Loan Audit will determine if the loan is even legal.

So, if you are in foreclosure, the best way to stop your foreclosure is to get a loan audit, then get your loan modified.

If your loan has adjusted, or about to adjust, your best way to modify your loan is to be armed with a loan audit.

If you simply cannot afford your payments, your best way to modify your loan is to be armed with a forensic mortgage loan audit.

Protect Yourself From Predatory Lenders

Wherever there is a pool of low-income homeowners or other groups of individuals who are financially vulnerable, the potential for greedy mortgage companies or con-artists to step in looms large. While the actions of these companies may not always be illegal, the result can be the same: the homeowners may lose their home and the professionals who supposedly 'helped them' end up profiting. These helpers are predators – seeking their prey from the elderly, the sick, the poor. Predatory lending practices can leave victims homeless and defeated, stripped of self-respect and hope, their credit ruined.

The definition of predatory lending involves who really benefits in the mortgage transaction. The fact that the homeowner does NOT benefit is what turns a legal mortgage into a predatory lending practice which can and should be reported. If uncertain whether a mortgage action is legal, or actually fraud or a form of predatory lending, then one should still report it and find out for sure. In many cases only a fine line divides actual fraud from an ethical and legal transaction.

For more information on predatory lending and or to find out if you are a victim click here.