When a lender discovers that a borrower is not able to make the regular monthly payments on a mortgage, the lender will often try to find ways to work the situation out to the bank's advantage and may not always be as beneficial to the home owner. In many cases, foreclosing on the home is not in the best financial interests of the lender and borrowers can instead work out a loan modification agreement.
Those who are not yet in financial trouble and have just taken on a mortgage should try to gather all of the documents related to correspondences between the lender and the borrower, including the envelopes that the correspondences came in. Certain documents are ineligible if the postmark is not available. Borrowers should also keep all paper related to financial information so that they can use this information when trying to paint their financial situation to the lender in the event that a modification is necessary.
The most useful financial information to keep is anything that indicates that the borrower is suffering from financial hardship. This can include utility shutoff and employment layoff notices. Records that document all loans and expenses can also help the debtor.
Those who wish to have their loans modified need to get in contact with the lender's loss mitigation department and try to avoid the collections department. The collections department usually does not want to transfer the borrower to the loss mitigation department, which is more likely to try to help the borrower avoid foreclosure. However, having a loan modification attorney can make it easier to get through to this department. An attorney often has contacts with those in the loss mitigation department of the bank.
Another approach is to try to get in contact with a live person on the lender's phone system who will be willing to transfer the borrower to someone in the loss mitigation department. Usually, there are multiple tiers in the department and the individuals in the lowest tier have no decision-making authority. These individuals will often try to collect from the borrower and are much more likely to work with a loan modification attorney.
The loss mitigation department will want all of the financial information that the borrower should have gathered and will use this information to make a decision on whether they will modify the loan and how they will do so.
Another thing that will be needed to get a loan modification is good faith money. This is often a portion of what the debtor owes in attorney and delinquent fees. Those who spend all of their money to pay off debt when they are behind on their mortgages sometimes have no money to work with when they try to negotiate a modification and are not able to qualify for the modification. This is one additional reason to contact a loan modification attorney to act on your behalf when seeking a loan modification.
If a borrower speaks to a loan modification attorney to ensure that the modification they get is actually a good deal for the borrower. Some poor loan modification plans will only temporarily forestall a foreclosure to get the most money out of the debtor.
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