With the housing industry still struggling to get back on its feet, loan modification is fast becoming the solution of choice for troubled homeowners. But as anyone in the business knows, it’s not as simple as coming up to your lender with your contract in hand – and it’s definitely not cheap. People either have to wait months (and fall even further behind) for a government-backed modification, or pay vast amounts for third-party intervention.
That’s why many borrowers are considering a do it yourself loan modification. It obviously takes more work, but the apparent benefits seem to be worth it: it’s cheaper, gives you better control of the outcome, and carries a lower risk of fraud. But it still pays to play it safe and make sure you do things right. If you’re considering a “Do it Yourself” loan modification, here’s a quick guide to help you make the right decisions.
Know your lender’s policies.
Each lender has its own take on dealing with delinquent borrowers. For one thing, not all companies will accept applications before the interest increases or shifts to an adjustable rate. Some will only approve borrowers who have been delinquent for at least three months. Before showing up, make a call or talk to a representative to see if you qualify. Simply being informed can tell the lender that you’re serious about getting back on track.
Request a loan modification package.
Most lenders have a written loan modification package that includes everything you’ll need for a do it yourself loan modification, including a rundown of their policies and loan modification requirements. Call your bank and see if they can mail you a package. That way, you can fill out the forms at your own pace and have time to think over your answers, rather than do it hastily in front of a waiting representative.
Make an accurate financial report.
While a good hardship letter can help, lenders really just want to know that the hardship’s over and you can start paying them again. So make a detailed report of your income and expenses, and back everything up with tax forms, pay stubs and W-2s. If you’ve lost income due to illness or job loss, make sure to note whether it’s permanent or temporary.
Stay calm.
A typical loan modification representative has to deal with hundreds or even thousands of troubled borrowers every day, each one with a sad story to tell. The last thing they need is an irate caller who demands immediate service – it’s the best way to get your paper to the bottom of the pile.
Document everything.
Major lenders have had recent trouble keeping up with vast volumes of loan modification applications, and among the main problems is when files get lost in processing. To avoid delays, record every call, letter and fax you send and receive, complete with the dates and titles. This is especially important for “Do it Yourself” loan modifications, as you don’t have an agent to organize things for you.





TALF helps investors to buy consumer debt-backed securities, by granting them low-cost and short-term loans. These low-cost short-term loans lasts for three years and their main focus in on car loans, credit card loans and other small securities. Now in order to increase the investors in Commercial Mortgage-Backed Securities (CMBS), the Federal Reserve is planning to extend the term of these short-term loans to five years.

RSS - Posts