The Mortgage Professor
The Steps to Mortgage Modification
|
TOOLBOX
   Resize
COMMENT
 Discussion Policy
 CLOSE
Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions. You are fully responsible for the content that you post.
Who's Blogging  |
I have been inundated with letters from borrowers who, for any number of reasons, can no longer afford their mortgage payment, although they could afford a lower payment. They want help getting their mortgages modified.
I have written several articles on modifications, but, as one letter writer put it, these provide "background but are not specific enough to really help." Ouch!
I'll attempt to make amends by laying out the steps in 1-2-3 order. Because the process is tedious, I have placed a lot of the boring details on my Web site, http:/
Here are those steps:
-- Establish that you would be better off with a modification than with refinancing: In general, borrowers should seek refinancing rather than a modification if they can do so at a significantly lower rate at a reasonable cost. However, you can't refinance advantageously if you are behind in your payments, have little or no equity in your property, or don't qualify for a refinance for other reasons such as a low FICO credit score or inability to document adequate income. (If you are still not sure, read "Mortgage Modification or Refinance?" on my Web site.)
-- Deliver the information the servicer requires, in the form the servicer specifies: The loan servicer is the company to which you make your mortgage payments. It will be the one you deal with on your modification. The most important part of the process is to place in the hands of the servicer all the information about you that the servicer needs to make a decision. While this information is pretty much the same for all servicers, each has its own questionnaire that it expects to be used.
To help you with this, I have compiled the information required by each of the major servicers and how to get their questionnaire in "Mortgage Servicer Information" on my Web site.
-- Make sure the information you provide is correct: Having the right form is one thing, but filling it out correctly is something else. A questionnaire with obvious errors may fall to the bottom of the pile, or it may lead the servicer to conclude that you do not qualify for a loan modification when, in fact, you do. Being accurate is a challenge for some borrowers because most questionnaires are not borrower-friendly. In the future, I will write about some of the sources of help available.
