If you’ve got an upside down mortgage or if you’re behind on your mortgage payments, perhaps it’s time to consider a mortgage loan modification!
Since last November, we’ve been on a quest to modify our mortgage loan. Health problems, rising costs and lowered income were factors we realized might impede our ability to meet our monthly mortgage payments. When our mortgage payments were increased in February, we missed our first payment in eight years. We are now many days in default. Following is what we’ve learned so far about the loan modification process.
Behind On Your Mortgage Payments? Get A Mortgage Loan Modification
This is our personal story on how we are going about pursuing a mortgage loan modification.
HUD Hope For Homeowners Is For Educational Purposes
In the beginning, we relied on HUD Hope for Homeowners to make progress on our behalf. We soon learned that this housing assistance program gives you options but does not pursue them for you. By giving you basic information about the process, HUD attempts to give you a greater understanding of loan options for you to negotiate with your lender directly.
Banks Want All Their Money
Despite the fact that the government has jumped in with a mortgage bailout and rescue plan, many homeowners are still finding themselves in trouble. With times the way they are, even banks and insurance companies that participated in a bail out still want all their money; they’re not going to cut you too much slack. In my case, my conversations and files with these companies were “lost” several times, impeding and halting the loan modification process. When I attempted to follow up, I was hit hard for payments rather than given negotiable options.
Visit A Physical Location
After several months of meaningless banter and lost paperwork, we decided to visit a physical location personally. Our mortgage lender has a branch bank in our neighborhood. We sat down and discussed our situation with the branch manager on two occasions. On our second visit, she realized we were serious about meeting our obligations and saving our home. The bank manager facilitated our first meaningful negotiations with the homeowner retention division of the bank. She also faxed paperwork on our behalf to ensure that the documents were received.
Assemble Your Paperwork
If you need a mortgage loan modification, make sure you have crucial paperwork at your fingertips including:
- Two months of bank statements if you are self-employed or receive direct deposits;
- Two months of records, if you receive pay stubs;
- Tax returns with W-2s for the past two years;
- A letter or affidavit of hardship explaining why you cannot currently meet your monthly mortgage payments, i.e., health issues, unemployment, increased expenses, etc.; and
- A summary of your current financial obligations including monthly utilities, insurance and outstanding loans and credit cards.
Follow Up Constantly
Each time I send paperwork or receive a warning from the mortgage lender, I call to speak to a representative about it. Following up is crucial to making progress. Every month, the number of foreclosures increases, which means you are just another account number in a stack of papers. Making calls keeps your file moving. Recently, I was told by the bank that I did not qualify for a loan modification but a negotiator was finally assigned to my file. The negotiator will attempt to work out a viable arrangement based on one of several programs. I was told to wait for the negotiator to call me in the next few weeks.
Keep On Moving, Don’t Stop
As I waited for the negotiator to call back, I continued to worry that my loan might fall into default given the wait. Foreclosure proceedings could be initiated after 90 days, after all. Though I was reassured that all procedures were stayed while my file was being evaluated, I haven’t had much luck with the lender in the past. I decided to call the State Banking Department to explore my options and here’s where I found out about several free debt counseling services that helped people face mortgage modifications. These free services including the state Fair Housing Authority, Catholic Charities and the United Way. Be prepared, however, to leave messages with these agencies as they are all overburdened with telephone calls about foreclosures.
Don’t Get Discouraged
I felt a bit anxious and discouraged after I found out that my home loan modification was declined and there was nobody I could talk to. But eventually, I received a call back from all three agencies. And here’s the good news: because my husband is a disabled veteran and we feel we were victims of a predatory lender, the Fair Housing Authority will represent us in negotiations. There is no fee for their services and we’ve scheduled a meeting with them. Hopefully, something positive will result from these meetings. I’ll be sure to update you about the progress we’ve made!