Facing Foreclosure? Why Not Try to Modify....

Facing Foreclosure? Why Not Try to Modify....

Even though I am a Mortgage Broker in Palm Beach Gardens, Florida one thing stays constant know matter what part of the country you are in. That is Mortgage Brokers, Loan Officers, Mortgage Bankers and Loan Originators all earn a commission when your loan closes so before you come to us on your Foreclosure Bailouts why not try to work with your current Lenders to help modify your current Mortgage. Especially, at the present housing market these Lenders now more than ever DO NOT Want your property know matter how much equity you have in it.

Recently, I was working with a client who was served with Foreclosure papers and had assumed (we all know what that means) that the current lender would not help her modify the current mortgage. Her assumption was based that her loan-to-value (what you owe the bank versus the appraised value of the property) was only 35% and was certain that the lender was a greedy and wanted her property. I informed the client that this is not as cut and dry as you think. With the recent collapse of the lending industry banks are over loaded with properties and would much rather help you modify the mortgage and keep you in the property than foreclosing on it.

My client was getting frustrated with the amount of time and the amount of phone calls that was taking place between her and her lender and asked me to simply help her refinance her property and start over. This sounds simple enough but now comes the fun part. Since my client is currently in a foreclosure process and part of the reason this came about was that she lost her job over the summer and was unemployed for 6 months conventional financing is out of the question. We would have to look for either Private Money or Hard Equity to help save her home.

Now when looking towards these types of financing options, this comes at a steep price for the client. The normal programs usually are between 3 and 4 points and the rates begin around 11% and can go up from their.

Modify

After I explained how this program worked I informed my client to try one last time with her current Lender. This time she got to the right person and was asked for the following documentation:

•· 12 Months Bank statements

•· W-2's

•· Last 2 pay checks

Does this sound familiar? It should. Just like when you applied for your mortgage (unless stated or no doc) you had to prove your income and assets. You are asking the lender for help to save your home from foreclosure. The Lender wants to make sure that you really need help and if they do what you ask from them it will place you on the right path financially. By simply saying I am not going to pay, this is not an option. You did sign an agreement that you would pay that mortgage at the closing table.

After reviewing these documents her current Lender agreed to place the 3 months of unpaid mortgage payments on her balance. This would mean at the end of her mortgage she would have to pay 3 more payments. (30 years down the road) The good news is in addition of taking her out of the Foreclosure process her current lender would report to the credit bureaus that her mortgage is now current.

Now in this case the clients mortgage did not adjust it was an unemployment issue that caused her problem. However, I have seen other modifications when the borrowers demonstrated to the Lenders the ability or lack of ability to pay the new payment and refinancing is not an option do to high loan-to-values. Please keep in mind this is not a standard practice in the lending industry and you will have to have patients and must be proactive when speaking to the lenders. Don't wait for the sheriff to come a knocking.

In closing, before going to your local Mortgage Broker, Loan Officer, Mortgage Banker or Loan Originator remember they get paid only if they close a loan for you. This is why finding a true Mortgage Professional really counts.

For More Mortgage Advice: Mortgage Advice in South Florida

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