Loan Modification Agreement
A Loan Modification Agreement modifies the terms of your home loan, normally by lowering the minimum payment to something more manageable for the homeowner.
Remember that your lender usually DOES NOT want to acquire your home through a foreclosure so you have no reason to hesitate to contact your lender when you foresee mortgage trouble on you horizon or you start to fall behind. Anytime you find yourself facing hardship you should contact your lender and ask for help. Your modification terms might be temporary or for an extended period of time, but in any case your lender is extending you a courtesy because it is usually in their best interest.
You have to demonstrate to your lender that once the Loan Modification is agreed upon you will be able to stay current with the new arrangement. Remember that although it is true that your lender does not want to foreclose but your lender is also in business and they want to know that with this loan modification you will be a stable borrower and that you will no longer be a credit risk.
If you would like more information on how to do a loan modification yourself just click here: http://www.homeretention.org/
*Tips For Successfully Negotiating Settlement With Your Lender
Have Realistic Expectations
Be honest with yourself and your lender. Before you begin the process of pursuing either a Forbearance Agreement or a Loan Modification, ask yourself if this is the best course of action for your financial situation. If you are not in a position to keep your newly negotiated agreements (or the agreements you are about to negotiate) then a Loan Modification may not be the best option for you. You need to negotiate in good faith and only make offers that you can keep.
The process of getting a Loan Modification requires a great deal of your time and effort. Your lender will expect you to submit information that will prove to your lender that once the terms are renegotiated you will be able to keep up your part of the settlement. Some of the questions your lender will ask you will touch on some sensitive and personal issues.
Honestly assess your financial situation. Ask your self “Do I really have a steady financial foothold? Are the situations or circumstances that put me in this position finally and truly behind me and am I in a position to move forward?” Loan Modification may not be the best route for you to take. Remember that Loan Modifications are great tools to help people who have suffered a temporary financial set back that led to a delinquency. Loan Modifications are not for those who have chronic financial instability or are still going through a rough financial situation with out a resolution in the foreseeable future.
If you are looking at a Loan Modification be certain that you can afford the new monthly payments that you are hoping your lender will approve. Going through the whole process is a waste of time if in the end you end up with a payment you still can’t afford. Know what you are able to pay for your new mortgage and ask for it. Your lender may be unwilling to make the adjustments you are asking for, but that does not change what you can or cannot afford. It is important to ask for an adjustment that puts the monthly payment back into the range that you can afford from month to month.
NOTE: While taking a hard look at your financial situation you must also take a hard look at what you can cut from your household budget. Be prepared to make sacrifices and modify your spending habits to reduce your “discretionary” expenses. Remember you are asking your lender to forego money that they are entitled to, and that you promised to pay, you should be willing to make sacrifices and adjustments as well.
More information and tips on how to successfully submit a loan modification can be found here:
By Eric D. Muhammad