One alternative to foreclosure or short sale is a loan modification which may be offered by a mortgage holder to help a homeowner stay in their house. Many banks actively promote this alternative and it can be a win-win situation for the bank and the homeowner by allowing the bank to continue receiving payments on a loan and allowing the homeowner to stay in their house. Generally speaking, the person you will work with at the bank on a loan modification is extremely helpful and caring as they work through the modification process with you. Yet, bank executives, those who decide policy and must figure out how to keep the bank making money, will have a different view point. We all know banks are in business to make money. They make money through charging interest on loans and those much loathed overdraft fees, right? Bankers are good with numbers. They know how to make money. One way they make more money is to get borrowers to make payments on their loans. The sad truth about loan modifications is that only 1 in 8 loan modifications is successful. In other words, 7 out 8 loan modifications wind up in foreclosure. In fact, I just had an attorney tell me it was more like 19 out of 20. The other number bankers know is that once a borrower has missed 3 payments, there is a 99 percent chance the homeowner will lose the house. This has always been the case and bankers know their numbers. The banks know, as soon as they receive your financial information, if a loan modification will work or not. So why would a bank continue to work with you on a loan modification if they know immediately that you will not qualify? All loan modifications start with a trial period. If you make the first three (or six or whatever number the bank gives you) payments, then they will offer you a permanent modification. The terms are often not specified because they “want to see if you can make the trial period payments.” What just happened? You agreed to pay the bank more money when they may already know you won’t qualify for a loan modification. Remember, too, that 99 percent of the time, if three payments have been missed, the loan will be foreclosed on.
The banks have a calculator to determine if a borrower will qualify for a loan modification. We also have access to a calculator which will determine if you qualify for a loan modification or not. If you would rather save your money to move or for a deposit on a rental if you do have to move rather than be told after making payments to the bank that you do not qualify for a loan modification after all, why not find out if you actually do qualify for a loan modification before starting the process? This is a no cost to you service. Just contact me, Lisa, at 702-401-2349, or email me at email@example.com. I’ll be happy to help you find out if you would qualify for a loan modification.