| Struggling homeowners need help to convert their | | | | You can also learn about the various workout |
| unaffordable home loan into a new, modified program | | | | programs in a Guide, as well as get help to send in |
| that offers a lower, affordable monthly payment. What | | | | your application package. |
| are the lender loan modification programs and how | | | | 7. Do you have to be delinquent on your payments to |
| can you find out if you will qualify? Here are some | | | | get loan modification help? Most lenders do not require |
| frequently asked questions from homeowners and | | | | you to be late - however you must face an imminent |
| some answers that may help you get the help you | | | | hardship-perhaps an interest rate adjustment in the |
| need with a loan workout: | | | | near future, or a reduction in income. Keep in mind that |
| | | | homeowners facing foreclosure will receive priority |
| 1. Who qualifies for loan modification help? Borrowers | | | | review of their packages. But the sooner you get in |
| who have an adjustable rate mortgage, or you have | | | | the system, the sooner you will get loan modification |
| suffered a financial hardship may be eligible for one of | | | | help. |
| the lender programs that can reduce your current | | | | 8. Will I get better results if I pay a loan modification |
| mortgage payments. | | | | company? Not necessarily-many of these companies |
| 2. How does the lender arrive at my new lower | | | | have little or no experience and offer no guarantee of |
| payment? Each bank has slightly different loan | | | | success. If your case is complicated, or you feel that |
| modification programs, but generally the new modified | | | | you have legal recourse due to misrepresentation or |
| payment is targeted to equal between 31-45% of your | | | | fraud, then you may want to retain the services of an |
| gross monthly income. Obama's stimulus plan targets a | | | | attorney who specializes in this field. It is illegal in most |
| modified payment that equals just 31% of the gross | | | | states now to charge an up-front fee for loan workout |
| monthly income. Make sure you know how to figure | | | | services-even from an attorney. |
| your debt ratio when preparing your application. | | | | 9. What about do it yourself loan modification? |
| 3. Will I get a lower interest rate? Most loan workouts | | | | Thousands of borrowers have already successfully |
| involve a lower interest rate, a longer loan term, | | | | modified their loan. You can too with some research, |
| perhaps an interest only period, or principal | | | | preparation and persistence. After all, no one is more |
| forbearance. Usually a combination of some of these | | | | motivated than you are to save your families home-a |
| options will be utilized to arrive at the lower mortgage | | | | determined, knowledgeable homeowner has a very |
| payment. | | | | good chance at receiving loan modification help from |
| 4. What happens to all of the fees and penalties my | | | | their lender. Use a software program designed just for |
| bank has added to the loan? Many lenders will waive | | | | homeowners to help you prepare your financial |
| the fees and penalties as part of the loan modification | | | | statement and make sure you meet the approval |
| program. The missed payments can be added back | | | | requirements. |
| into the loan balance and spread out over the loan | | | | 10. Where do I start? Fortunately, you do not have to |
| term. HAMP mandates that certain fees and penalties | | | | try to figure this all out by yourself. You can use an |
| be waived-so make sure that your bank does not | | | | easy to understand, step by step handbook and |
| include those in your loan workout. | | | | software program that takes you from beginning your |
| 5. Does it cost anything to get loan modification help? | | | | application through submission and acceptance. |
| Your bank will not charge you when you apply, | | | | If you are facing the very real prospect of losing your |
| however you should be prepared to make a good | | | | home, time is not on your side. Begin today to learn |
| faith payment once the loan workout has been agreed | | | | how to improve your chance of getting the loan |
| to. Most lenders will ask for at least the first months | | | | modification help you need and deserve. If you don't |
| payment to be made at the inception of the | | | | understand how to figure your debt ratio, target |
| modification. | | | | payment, disposable income or any other qualifying |
| 6. How can I find out what my lenders loan | | | | criteria, you can take advantage of a easy to use |
| modification programs are? You can contact your | | | | software program that will do all the necessary |
| banks loss mitigation department and ask them to | | | | calculations for you automatically. Take the time to |
| send you an application package. Most banks are | | | | research, learn and prepare-your efforts will pay off |
| providing assistance to borrowers under the HAMP | | | | with a new lower mortgage payment and you can get |
| federal plan, as well as their own in-house programs. | | | | a fresh start with your lender. |