Qualify for a loan modification today

A loan modification can save you thousands of dollars per year in mortgage payments. Our Arizona loan modification program can save your home from a foreclosure. Before you decide to apply for a loan modification, there are lender guidelines you must abide by before starting the loan modification process.

Arizona loan modification procedures vary from lender to lender. A common denomination of requirements found by all lenders is that you must state your gross and net income, the equity invested in your home, and whether the home value is less than what you owe on your mortgage.

Some documents that are required are a hardship letter, proof of income, financial worksheet, and borrower and co-borrower information sheet.
Many homeowners avoid from attempting to apply for a loan modification because they have no experience or knowledge to forgo a loan modification. Too many paper work and forms to provide and not understanding specific guidelines, hinders a homeowners chance in applying for a loan modification, let alone getting one approved.
Many lenders will accept the following as a hardship: Divorce and separation, death, illness, loss of job, job relocation, military service, an adjustment of a mortgage loan to higher interest rate, and entering into a contract with a fraudulent lender.

Financial worksheet also plays a role in the loan modification process. You may be denied approval due to your current income and expenses. The lender needs to be sure that you can cover your monthly mortgage payments as well as other additional expenses.

Finding a reputable company is important to start the loan modification process. This will keep your sanity and save you a lot of time and aggravation in trying to do it yourself.

Pros and cons of a mortgage loan modification

Mortgage loan modification defined- A loan modification is a permanent change in the terms of a mortgage. This is usually facilitated by the loss mitigation department of a lender or company when the homeowner (borrower) has fallen behind on their monthly mortgage payments. The loan modification of mortgages is a large part of the current stimulus package being advertised by the Administration as a way to help homeowners get back on their feet. The mortgage modification will be handled by the current service department and does not require a new appraisal. There are no closing costs and consequently no closing cost will be charged.

The main reason homeowners request for a mortgage loan modification is to improve their current mortgage situation and the lender is not likely to grant a loan modification unless there is the realistic probability that the homeowner will be prepared to meet the mortgage obligations in the future.

Loan modification plans today are better regulated

Mortgage loan modifications in the past have not been carefully structured by loss mitigation departments and companies and have unfortunately resulted in re-defaults by several homeowners and borrowers within a short period of time. Current guidelines today are now carefully managed and the occurrence of re-defaults have been drastically minimized.

What to expect from a loan modification

• Interest rates may be lowered
• The balance on the loan can be adjusted if it is determined that the outstanding balance exceeds the existing value of the home
• Mortgage rates will most likely be converted to a fixed rate rather than a variable rate
• A combination of the above things can be done in order to reach a reasonable payment based on the financial situation of the borrower
• The loan term can be modified to a longer term to allow a longer repayment plan

During a mortgage loan modification, lenders or service companies are paid a fee to process a mortgage loan modification. The homeowner (borrower) should expect to provide documentation of their finances and prove that they have the ability to maintain the new proposed mortgage payments.

Avoid foreclosure scams

Homeowners, be careful of services which offer mortgage loan modification. You should not provide up front fees for loan modifications. Nor is it necessary to sign a power of attorney or give over your deed to your home in order to get this done. If you ever feel the need to seek professional help, remember to understand the contract terms before signing. Seek government licensed and bonded companies.

Remember and take note that no lender or loan modification companies can guarantee a loan modification. Loan modification is a service that can be requested, but results can not be demanded.

Refinance vs Loan Modification

Arizona Loan modifications are applicable in the real estate industry when mortgage property values have declined significantly.

Due to the booming real estate economy in the late 90’s and most of this decade, not very many homeowners need to learn about the loan modification process. This resulted in many homeowners applying for a refinance. A refinance is sensible in a stable or increasing market. It offers homeowners the ability to take out cash when needed, fix or lower their interest rate, among the possible options.

The basic difference between the 2 options can be outlined on the following list. In a refinance, the borrower pays the closing cost, a refinance requires an appraisal report, requires escrow and title policy, offers a rate that is subject to current market conditions, homeowner must have a verified income, a credit score criteria must be met, and will take 1 to 2 months to complete.

In a loan modification, an appraisal is not needed, no escrow or title is required, homeowner must have a verified income, homeowners credit score is not as important, will offer a lower interest rate, and can take 1 to 4 months to complete.

When considering a loan mod vs. refinance, homeowners need to outweigh their options. Struggling homeowners need to take the time to understand their options.

Be scam smart

Research is important in spotting foreclosure scams.

Today, there are wide ranges of loan modification programs and services provided to consumers. This is great because this allows the consumer several purchasing options. The main disadvantage is that more time and effort is needed to seek out reputable companies. Those who are too busy or don’t find researching necessary is susceptible to foreclosure scams. Unfortunately, some companies take advantage of these customers.

Beware of potential loan modification scam artists.

The growth of foreclosure scams are expected to increase in correlation to the increase of home foreclosures. It is most likely a scam if you are required to sign a deed of your home; to an individual or company. Typically the deed is never recorded. Be cautious if you are told that a real estate agent or a title-escrow company is not required in the transaction. Also beware if the buyer says they are taking over the payments of the house or if the buyer tells you that they will purchase your house for the sum of the mortgages you owe and pay you an additional amount of money. These are all red flags to consider when dealing with an unethical servicer.

Avoid loan modification companies with upfront fees

If some loan modification servicer offers a large upfront fee and then charges a nominal monthly payment, you must avoid companies like these as their main intention and interest is trying to get you to sign up rather than keeping you as a regular customer. Most importantly, if you encounter a loan modification company that charges an outrageous and one-time fee, I think it would be understandable that they will make more money the sooner you go away. Loss mitigation companies charging a sensible monthly fee with a nominal or no upfront cost will have a greater interest in keeping you as a happy customer.