Mortgage Modification - Answers to Common Questions
Foreclosure, News, Real Estate
November 20th, 2008
In a recent CAR newsletter is stated that October 2008 saw a 25% increase in foreclosure filings over the same month last year. While the great majority of mortgages are being paid on time, there is no denying that a significant number of American housholds are having trouble paying their mortgage.
In response. the California Association of Realtors (CAR) has published a reference document to help (click on the link): mortgage-workout-chart-car
Remember that these are general guidlines. Each loan workout is done on an idividual basis and there may be more possible solutions than commonly thought. Some lenders are actually deferring payments for a period of time, regnegotiating interest rates and even writing down part of the principal.
My advice is to contact your lender as soon as possible, and don’t wait until you’re behind on your payments. Be prepared to provide the following:
- Loan number
- Income documentation
- Most recent mortgage statement
- Bank statements
- Hardship letter (be brief and to the point)
Other information you may need to provide:
- Tax return
- Monthly expense information
If your lender is not named on the workout chart, don’t despair. Contact them ASAP via email, snail-mail, phone, any way available. Most lenders are anxious to work out a solution with borrowers. It’s very important to go into any negotiations with the attitude that it is in the best interest of your lender to work with you - and in most cases it really is.
The most common mortgage modifications are listed below:
lowering the mortgage interest rate
reducing the mortgage principal balance
fixing adjustable interest rates within the mortgage
increasing the loan term throughout the mortgage
forgiveness of payment defaults and fees
or any combination of the above
Check out this public service site: http://mortgagemodificationinfo.org
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