Loan Modiﬁcation

What is Loan Modiﬁcation -- and Can it Really Help YouSave Your Home?

Hi everyone.There

s been a lot of talk and misinformation out thereabout loan modiﬁcation -- what it is, how it works, whatyou need to qualify for one, etc. -- that I thought I

d putthis short guide together to help fellow homeowners whoare thinking about doing a loan mod for any number ofreasons...-- Because you

re “upside down” on your home (i.e. youowe more than it

s worth)-- You

re in danger of falling behind on your mortgage-- You

re already facing potential foreclosure-- Or some variation of those three reasons, or someothers that I haven

t even mentionedLoan modiﬁcation can help in all of these cases, so it

s important that youunderstand it.In fact, in many instances a loan modiﬁcation is THE ONLY way to saveyour home. So yeah, it

s pretty important to get this right.First, I want to let you know that I

m not an attorney or real estate agent orinvolved in the mortgage industry in any way. I

m just someone who doesthe research that needs to be done, and shares it with my fellowconsumers.

So, I hope this information helps you. But please don

t contact me askingfor legal advice.(By the way, yes, I do recommend that you get a professional to help with aloan modiﬁcation. You

ll see why below. You can

get in touch with theﬁrm I recommend right here

. Click on the link to check them out. They

reone of the only companies I found ANYWHERE that offers a guarantee.Either they get your loan modiﬁed or you don

t pay a dime. That

s VERYimportant with this process, so I recommend you

ﬁll out the form on thissite

and let them ﬁgure out if they can help you.)

What is a Loan Modiﬁcation?

A loan mod is just what it sounds like -- amodiﬁcation to your loan agreement. IT ISNOT REFINANCING, so please don

tconfuse the two.With a loan modiﬁcation, you

re taking theloan you already have and changing it --reducing the interest rate and sometimesthe principal -- so that it comes out to be apayment you can afford.

Why are Banks Doing Loan Modiﬁcations?

This is the strangest part of the whole thing. Theeconomy is SO bad rightnow that they basically have no choice.Banks pay a hefty “penalty” when they foreclose on a home. In addition tothe fact that it takes them a long time to sell the property, and even then they don

t get the real market value, they also have to tie up outrageoussums of money in escrow while the whole process is going on.This is why so many banks are failing.

And this is also why banks LOVE loan modiﬁcations. Even though theymake less money, it

s better for them in the long run.

How Loan Modiﬁcation Works

This is the tricky part, and it

s why I always suggest that you don

t take aHome Depot do-it-yourself approach.For one thing, as I said above, for many people this is the last chance youhave to avoid foreclosure. It

s important that this not be taken lightly.Even experienced loan modiﬁcation attorneys get told “No” by banks moreoften than they

re told yes.But here

s the big difference -- for most of us, if the banks says no, it

ssimply game over. Your home is gone. And believe me, you

ll wish you hadgone with that professional at that point.But there

s no going back.But here

s where attorneys just get started. If the banks says no, the lawyergoes back to them and asks again.If they say no a second time, then maybe he asks again, but this time hestarts hinting at performing a loan audit and hauling the bank into court ifeven one period is upside down in that contract.And believe me, banks DO NOT want any part of that. If they lose that kindof case, the attorney can try and have the entire loan THROWNCOMPLETELY OUT. Imagine that.So the banks are going to take this a little bit more seriously if they knowthe person on the other end of the line isn

t even a little bit afraid abouttaking them on and making their attorneys earn that retainer.