Loan modification- The timing is right now
During the past 21 years in the mortgage and finance industry, I have never seen interest rates as low as they are today. There has been a surge in refinance applications within the past 4 months as a result. I used to think that 6.25% was an excellent rate, until recently. Many of the consumers who are applying for mortgages are actually refinancing loans that they had only taken out 2-3 years ago. With rates as low as they are now, borrowers who are currently at 6.25% are seeing a tremendous monthly savings. Unfortunately, refinancing is not an option (or even possible) for most people.
Many consumers who are trying to take advantage of these low rates are being turned down. In fact, the percentage declined loan applications are very high. The three main reasons why many borrowers are unable to refinance their homes are:
1-No equity. Property values have corrected significantly in the past 2 years to the point that many homeowners have no equity or are ‘upside down’, meaning they owe more than their home is worth.
2-Loss of income or wages. Many individuals have taken a reduction in pay. Others who have lost their jobs are seeking employment with less pay due to the weak economy.
3-Credit problems. Is it estimated that 50% of Americans have suffered credit problems during the past two years as a result of the economic downturn and hard times.
Any of the above would make it impossible to refinance. I am seeing countless people being turned down every day for mortgage financing, seemingly unable to take advantage of these unprecedented rates. However, there is a solution for individuals looking to capitalize on today’s low interest rates. This solution is a loan modification.
Although loan modifications have been popular now for the past 2 years or so, now more the ever is the best time to explore this option. One of the most important considerations your lender will look at in evaluating your chances for getting a modification is the payment reduction and benefit to you, based on current market interest rates. With current rates at 4.75%, and many borrowers at 6.25% or higher now, the payment reduction benefit is gigantic! All other qualifications being equal, you stand a better chance of getting approved today for a modification than you would have 6 months ago. For example, if current interest rates were 6.5% (like they were last year), banks would be less likely to grant you a modification. The reason for this is simple. For a modification to make sense, the bank would have had to give you a rate below 6%, which they were not too excited about doing last year. Now fast forward one year. Since rates have fallen so much, and many consumers are at 6% and above right now, lenders are becoming more relaxed and are offering additional options that they hadn’t previously. It’s just not as painful for them to modify loans as it was before, when rates were higher.
Rates will never be this low again. They will soon rise and banks will no longer be as flexible as they are today. Don’t under estimate the power and the results that can be achieved by modifying your loan. I have personally seen mortgage payments cut in half, principle reductions of $30,000, adjustable rate loans turned into 4.5% fixed, and delinquent payments (8 months past due!) brought current. The best part about all of this is that there are no closing costs, nothing. When you deal directly with your bank it’s free.
This is not to say that you should simply call the bank and they will automatically lower your rate. It is still necessary to understand how the modification process works and how the lender will qualify you for it. You only get one chance to present your case to the lender. You can’t go back and change the numbers if the bank says no. However, once you learn the basics of the process, the qualifying parameters and the right questions to ask, you will be able to present your case in such a way as to maximize your results, lower your payments, reduce your rate and possible cut your principle balance too. I can tell you this for a fact because I see the results every day. A do it yourself guide is all you need before speaking to your lender. Take advantage of the opportunity now before it is too late. For more information visit www.mortgageloanmodificationsecrets.com
May 29, 2009
Loan Modification- With Rates So Low, Now Is The Time To Consider This Option
May 28, 2009
Do It Yourself Mortgage Kit
A do it yourself mortgage kit is finally available to homeowners who do not want to pay $1,000s to a professional service. This Do It Yourself Loan Modification Kit guides you through a step by step process allowing you to reduce your interest rate and possibly even cut the principle balance your loan. A loan modification is not difficult once you have the basic understanding of the process and know what the banks are looking for in order to approve you. The results are often dramatic. Professional services are charging $1,000s for a task that any homeowner can do on their own. Before you consider using a professional, invest in a Do It Yourself Guide and you will quickly learn that this is a task you can very quickly do on your own.
May 21, 2009
Do It Your Self Loan Modification
With assistance from a Guide
The laws and guidelines are changing to make loan modifications easier for homeowners. Not more than a year ago the word ‘modification’ sounded scary and complicated. Homeowners had only heard of these words from attorneys or loss mitigation companies. Although sometimes they can be helpful if your situation is complicated (or you don’t have a little time to invest), many times it’s simply not necessary to spend thousands hiring a professional. A little knowledge from a good Do It Yourself Guide is all you need.
As banks begin to change and adapt to the situation that homeowners are now facing, they are learning to embrace the concept (and willingness) of offering loan modifications to their customers. In fact, many Banks prefer you don’t use modification companies at all. Chase, one of the largest banks, is an example of this. When you call their main mortgage customer help number, they have an outgoing message ‘warning of the use of 3rd parties modification services’. The message goes on the say that they do not charge money to complete a modification and it is not necessary to use a third party service to help with one’. Remember, professional services do not actually perform Loan Modifications, they only put your information together and present it to the bank. Ultimately, the decision is made by your current lending institution. However, I would not suggest speaking with your bank until you have done some research on your own as the approval process does require some qualification.
With just a little bit of knowledge, some understand of what banks are looking for, and a few hours of time you can Do It Yourself . For the most part, there are three main considerations when preparing your own modification:
1) Writing a detailed hardship letter explaining to the bank the circumstances behind why you are requesting a modification.
2) Preparing a monthly financial budget outlining your incoming, expenses and how your money is appropriated each month.
3) Understanding the debt to income formula that the Banks use so that you can maximize your potential for qualifying for the lowest possible mortgage payment.
With a little help from a Do-It-Yourself Kit, you will be able to prepare a hardship letter, construct a qualified monthly budget, and most importantly understand the purpose of the Bank’s Debt-To-Income (DTI) Ratio. Once you understand the process and the requirements, you will be able to prepare a proposal for your lender that will not only increase your chances of getting an approval, but maximize your payment reduction at the same time.
It is not necessary to pay $1,000s to a company for something that can easily be completed on your own. With help from a step by step Do It Yourself Loan Modification Guide, it is VERY possible to reduce your mortgage payment by 30% or more—for Free! This is a once-in-a-lifetime opportunity as banks have never been as flexible as they are now. Don’t wait, take advantage of this incredible opportunity.
May 7, 2009
How does a loan modification work
Do It Yourself Loan Modification
As a mortgage and loan modification professional, I am constantly asked” how does a loan modification work”? Although the term has only become popular within the past 12 to 18 months, loan modifications have been around as long as the lending business has. Until recently, the term was basically unknown because the results were not very successful. Things are very different today. Now is the time to take advantage of an amazing opportunity because of the economy.
A loan modification is simply a change, adjustment or an amendment to the original mortgage that a homeowner secured when purchasing their home. For example, let’s assume that you took out a fixed rate mortgage for $100,000 at 7%. At the closing on your property, you are required to sign a myriad of documents. One of those documents is called a Note. The note outlines the parameters in which your loan will be paid back. It includes the interest rate, the terms, the payments and conclusion date of the loan. Any alteration or change made on that Note is a modification. Loan modifications are achieved through negotiations with your lender. Your lender is the only one authorized to change or modify your note. Many consumers mistakenly believe that when they hire a professional service to modify their loan, that the company representing them actually performs the modification. That is the furthest thing from the truth. Loan modification companies merely act as your representative by preparing the necessary documents and communication needed to revise your loan. For this service they will generally charge approximately $2000. If you have a little free time and a desire to save money, you can easily accomplish this on your own with the same or better results. Remember, banks don’t charge for the loan modifications, modification companies are the ones that charge. If you do it yourself, it’s free. Plain and simple.
A loan modification works by putting the consumer in a better financial position than they were before. It works because it benefits both the borrower and the bank as well. The benefits to the borrower are obvious, a lower mortgage payment. The advantage to the lending institution can also be significant as well. Many people do not understand why a bank would be willing to reduce their interest rate without requiring a refinance or upfront money. As a result, most consumers are reluctant to explore the possibility of a modification because it doesn’t appear to make sense. “Why would the Bank just reduce the rate for no reason?”. Today, lending institutions are evaluating their entire portfolios and trying to improve stability. For example, if a loan is currently at 6 1/2 %, reducing the rate to 4 1/2 % would increase the strength of that loan by lowering the payment for the consumer. Another words if the bank reduces the payment on the loan, the possibility of a default by the borrower diminishes. Similar to the insurance companies, lending institutions utilize actuaries to calculate the risk on their portfolios, and what can be done to reduce it. Since bank portfolios are at the highest risk levels in history now, there is an explosion of loan modifications.
In addition, interest rates are at the lowest levels in recorded history. These new levels are now prompting banks to look at all of their customers to see if they are eligible for a modification. The consumer benefit is huge. It is not just the individual who is behind with his mortgage, or has bad credit or no equity. They are evaluating everybody to see how they can improve their portfolio. However, they are not proactive in contacting you. You need to initiate the action. If you know what the bank is looking for, you answer the qualifying questions correctly, put together a solid budget then you will easily qualify for a loan modification for free. Before you contact your bank is important that you do some preliminary research so that you’re prepared. Once you have the necessary tools you can achieve the same results as the professionals do, for free. A Do-It-Yourself loan modification guide is all you need to help you through this simple process. There is absolutely no risk to at least explore the possibility of a modification with your lender.
May 3, 2009
Loan Modification
As I mentioned in previous posts, It is not necessary to hire a professional and pay thousands in an attempt to fix your loan. Modifications are a great way to lower your mortgage payment, reduce your interest rate and bring your current mortgage back to a current status. In this climate, refinancing is really not an option. Call your bank, find out which department you need to speak to in order to modify your loan and then simply look for a purchase a simple Do It Yourself Loan ModificationKit. Follow the instructions and with little effort you will get professional results. Remember, even with a professional, not every modification is approved. Professionals will charge $1,000s and not gaurantee results. A Do It Yourself Loan Modification Book is very inexpensive and thus your downside risk is minimal.
