Frequently Asked Questions
Q: I am in Notice of Default. Can I still get a loan modification?
A: Yes. It’s always up to your lender. Your lender can decide to give you a loan modification at any point.
Q: If I have a sale date on my house, is it too late for a loan modification kit to help me?
A: No. While it may be more difficult, it’s never really too late! As long as you still physically occupy your house, you have a shot at a loan modification. In some cases houses have gone to sale, sold, and the new buyer/servicer/bank will modify your loan.
Q: Are a lot of lenders approving a reduction of the principal balance?
A: Currently most loan modifications do not include principal reductions. However principal reductions are done and we predict they will become far more common with deteriorating market conditions.
Q: Can I request my original loan documents to inspect them for potential fraud?
A: Yes. And if you feel you may have been a victim of fraud we suggest you do so.
Q: Does my lender have to give me a loan modification?
A: No, it is completely up to them. While they are encouraged to give borrowers loan modifications to avoid foreclosure and protect their own interests, they don’t have to do anything unless required by state or federal law or mandate. Some states call for certain lenders to offer loan modifications and loan work-out programs to certain borrowers. Keep in mind the laws are constantly changing so make sure to stay current on new homeowner laws.
Q: Can a company guarantee me a successful loan modification?
A: No. No reputable attorney or company can or will ever guarantee you an outcome. While they may assess your individual case based upon their experience, it’s ultimately up to your lender. If any company or third party guarantees you a successful loan modification, you should raise questions and perhaps avoid them completely. It’s not up to them. Even if they have a proven track record, they cannot guarantee success.
Q: Do I have to get an appraisal for a loan modification?
A: Probably not. While it is very uncommon, lenders do have the right to request one if they are modifying your loan. Also if you feel your house is way undervalued as a result of the market crash and/or property damage, you may want to get an appraisal; in most cases, lenders don’t want to foreclose on property that has lost significant value because they will incur further significant loss.
Q: Do I have to be late in order to qualify for a loan modification?
A: No. However, the chances of being successful are far greater if you are late because the threat of foreclosure becomes more real to the lender.
Q: Is a rate of 3% really possible?
A: Yes, in some cases your lender will lose less by NOT foreclosing on you even if they have to give you a 3% interest rate. In general, lenders typically want to avoid having to go through the foreclosure process to protect their own financial interests.
Q: How hard is it to modify my loan on my own?
A: If you are capable of taking notes, making copies, staying organized, and talking on the phone, you should be able to get through the process. Remember, the decision is up to your lender. So being polite at all times is critical.