Here are four simple steps that have been compiled by expert housing counsellors who are genuinely concerned about homeowners who are financially troubled:
Go to a counsellor
When you are not in a position to make your monthly mortgage payments, it makes sense to consult a housing counsellor. The experience and expertise of such a counsellor can help you make a counter offer to your mortgage lender that will make him consider your loan modification request.
Housing counsellors deal with such problems day in and day out. They know what needs to be done and how. Also, they have a lot of contacts that will help them achieve what they wish, in the fastest and the easiest way.
Whether your loan modification request has been denied or you have no idea about how to make this request, going to a counsellor can help you get your issue resolved, without wasting much time or money. Finding such a housing counsellor may however prove to be a challenge that you need to overcome.
An online search on a Housing counsellor should lead you to many such professionals who claim to help you with purchasing properties, renting out properties, resolving credit issues and offering proper advice on defaults and foreclosures. However, there is no way you can be sure that all these counsellors can be trusted with your details.
This is a delicate situation where you have defaulted on making your mortgage payments and you want to make your mortgage servicer agree to your loan modification request so as to prevent a foreclosure. Ideally you will need a housing counsellor who is experienced in helping out home owners get loan modifications. Do some research, get a few referrals and talk to a few people to make sure you have hired a perfect housing counsellor who can help you get out of this mess.
Go for the right type of loan workout
A loan modification can help you get a lower rate of interest, an extended payback period or even a forgiven debt, if approached in the right way. This is a great chance to save your mortgage. The different types of loan workouts include:
Forbearance: This type of workout allows you to pay partially or even skip payments during the period of your temporary hardship. You can resume full payments once you are back in a sound position and also pay an extra amount to cover your missed payments. At times your lender may even consider an extension of the forbearance agreement in case you need some more time to get back your finances.
Repayment plan: In case you have missed out on a few monthly mortgage payments, you can cover them up by entering into a repayment plan with your lender. The amount that you have missed out paying will be divided by a certain number of months. This amount will be added to you regular monthly payments. After the repayment period ends, you will resume back to paying what you would normally pay as your monthly mortgage payment.
Whatever type of loan workout you choose, make sure it is sustainable over the long haul.
Provide accurate information to your Mortgage Servicer
You are in this situation because you failed to pay up your monthly mortgage payments. So, one thing you need to stick to is honesty. Do not underestimate your income or inflate your monthly expenses while reporting to your mortgage servicer. You don’t want your mortgage servicer to lose his trust in you.
In order to be eligible to obtain a loan modification, you will have to prove that you are not able to pay up the monthly mortgage payments because of a certain financial hardship. You will also have to assure that you will be in a position to pay up the new monthly amount after a specified period of time. You will have to submit a list of documentation that will include:
• Your proof of income
• A financial statement
• The tax returns that you have filed recently
• Your bank statements
• A letter that explains your hardship clearly
Make sure you give accurate information through these documents. Also there is one thing you need to remember here. Your mortgage servicer is in no way obliged to give you a generous handout. Therefore, your expectations need to be realistic when it comes to loan modification. There is an extent up to which your counsellor can negotiate and if you try going beyond that you may end up losing that one last opportunity to avoid foreclosure.
Try getting financially literate
Yes, you may have a counsellor to represent your interests; but it doesn’t stop there. You may need some mortgage workouts in future too. A bit of financial literacy will help you take things in your own hands and handle them the way they should be handled. This does take some time and a lot of your efforts; but at the end it is all worth the trouble.
There are many lenders and counsellors who are ready to help homeowners come out of such situations. A couple of them may even contact you by getting your details from lead generation firms that sell top-quality loan modification leads and loan modification live transfers. Don’t hesitate to talk to them if they call you. Their services may be of immense help to you in resolving your issues.
At the end if nothing works out, you may even consider alternate options such as taking out a reverse mortgage, making someone else assume your mortgage, approaching a bankruptcy court, reducing your mortgage obligation and so on.