NEVADA HOME LOAN REFINANCE

LOAN MODIFICATION AND OTHER HELP FOR HOMEOWNERS

Is this just a buzz word, or are folks really getting assistance with modifying their loans so that they can afford their house payments?  According to forums online and real people I've talked to, yes, many lenders are working with borrowers and lowering their mortgage payments. 

What is a loan modification and why would you ask your lender to do it?  A loan modification is when the lender changes, or modifys your note for you.  They may lower the interest rate, thus lowering your payment, turn it into a fixed rate, freeze the rate it is at so that it doesn't adjust any higher, extend the time for the initial "teaser" rate, or a combination of these things.  They may also add any back payments to the end of the loan so you are no longer behind on them. 

One reason you might need your lender to do this for you is if you were in an adjustable rate loan, your property value has decreased, and your rate adjusted and you can't refinance out of it.  Another reason might be if your income has dropped and you can't afford your house payment as a result.  Whatever the reason, if you are struggling or already falling behind on your house payments, call your lender, let them know your situation and request a loan modification.

How does the process work?  After you request the loan modification, you will receive by mail or fax some forms to fill out, just a couple, and instructions on what to do next.  They will ask you for a letter explaining why you are having a hard time making your payment, and probably they will want paystubs and bank statements so they can see how much of a payment you can afford.  They will ask you specific questions about how much your income and expenses are.  Be honest, but pessimistic with your answers.  They need to see that you can't afford the adjusted payment, but they also need to see what you can afford, and it needs to be reasonable.

Once you have filled everything out, the fun begins.  You fax the paperwork back and they tell you that you will hear something in 30 - 45 days.  Don't believe them.  You will have to call regularly and often and be on hold and be transferred and be on hold some more before this is all done.  Take notes with phone numbers, names, times, and what the outcome was so that the next time you call you have a point of reference.  It is a frustrating and time consuming process, but can payoff with a lower payment if you are persistent.  Also, be aware that the main number you call is just the collection department, not the acutal loan modifying department.  Once your paperwork is there, it's the loan modification department you want to speak with and they guard that department like it's Fort Knox.  Be prepared to get transferred a zillion times before you finally get there.

Some helpful Info--Because the process is so tedious, there are people that do it for you for a fee.  The fee ranges from an amount equal to one mortgage payment to a flat fee of $1500 - $3000.  There are more and more companies doing this and many guarantee results.  Most of them will take a look at your paperwork first, then let you know if they can do it before they take your money.  If you don't have the patience or are too overwhelmed to tackle it yourself, this might be a good option. 

www.hopenow.com is another site to check out with it's links.  You can also call 1-888-995-hope (4673) and talk to a HUD counselor for more information.  They may be able to assist you with your loan modification request.

One site I found pretty helpful and that actually gives some free information is www.mortgagereliefformula.com. Watch the short video for helpful tips.  He also gives some information on how to negotiate a short sale with your lender.  This is when you are paying off less then what is owed on the mortgage, through a sale to a new buyer.  Your current lender has to agree to take less then what is owed on the property.

What else can you do if your rate has adjusted or is going to adjust?  Give me a call for more options.    If your rate hasn't adjusted yet, but is going to soon, it's not too early to call now.  I can check your credit and your home value and see where you stand.  Maybe you have equity, but your credit needs improvement to qualify.  I can show you what to do to improve your credit, then by the time your rate adjusts, you can qualify to refinance.  Remember, that it is even harder to qualify for financing now then it was 2 or three years ago when you got your loan.  Your credit history and score are more important now then ever.

What if you don't have equity?  Well, if you have a first and a second mortgage, like so many people do that got 100% financing, we may be able to refinance your first, then have your second loan subordinate.  That means your current lender for your second mortgage agrees to go behind a new first mortgage.  It means that between the two loans, you will owe more then your property is worth, but if you want to stay in your home, it will help you afford your payment.  Over time, your property will go up in value again and when it does, you can refinance out of the second loan altogether.  This is a good option if you plan on staying in your home for a while.

The main thing to remember if you find yourself not able to make your payments is talk to your lender!  Don't wait until there is an eviciton notice on your door because then it is too late.  It may seem easier to just let it go because you are overwhelmed or depressed about your situation, but it's truly better for you to call them and tackle it.  That's the only way you may get some relief if you want to stay in your home.