10 Tips for Making it through the Loan Modification Process Successfully

The road to a loan modification can sometimes be long, confusing and stressful, depending on whom you work with and how long you’ve been facing foreclosure. We’ve been in this industry since 2004, and have seen it all.

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At the heart of the loan modification process are people who are on the verge of losing their homes, and they need to take care of themselves both mentally and physically during this important time in their lives.

So, we’ve compiled a list of our Top 10 tips for making it through the loan modification process successfully, and we’ll share those with you now.

  1. Be proactive, not reactive. The problem becomes bigger the longer you ignore it. And, back payments increase as you fall behind further. While the first step is often the hardest, you’ll never regret exploring your options sooner than later.
  2. Set aside money. You want to set aside a monthly mortgage payment you can afford during the process, or at least save as much as you can. Worst case, you may have to pay for relocation; best case, you get approved and can pay down debt or reward yourself accordingly.
  3. Manage your stress. Take care of yourself while you are going through this stressful time. Managing stress means a healthy mind and body. So watch what you eat, get plenty of exercise, drink water and rest well.
  4. Be wary of telemarketing calls and ads for mortgage relief. Many are just marketing companies routing calls to inexperienced law firms or illegitimate companies. Local is sometimes better, but not always, and can be more expensive. Reputable nationwide firms may have more clout with lenders because of key relationships and the volume of files they process.
  5. Learn from loan modification and foreclosure experts only. Knowledge is power, but only if from a credible source. Getting expert advice from a bankruptcy attorney may be like getting medical advice from a brain surgeon when you are having a heart problem.
  6. Question everything. The majority of information available via the Internet and so-called loan modification experts is misleading or inaccurate. Carefully evaluate information prior to accepting it as a fact because it could make the difference between you being able to avoid foreclosure and save your home. If it sounds too good to be true, get multiple opinions from professionals or attorneys that can verify their track record of success with loan modifications. Also, some attorneys may use legal jargon in an attempt to impress you or build credibility, so if you can’t understand something that is being explained to you, you may be taking on unnecessary risk and becoming a test case.
  7. Ask to speak with those who have success stories. Yes, most folks that make it through loan modification successfully may want to put this behind them and consider the matter private. However, there should at least be three to five testimonials from homeowners that would be willing to speak to you as long as the company is reputable because they know how important that may be in your decision-making process. So, if a company can’t provide any references, it means they probably don’t have any.
  8. Keep detailed, organized notes. You’re likely going to get different stories from different sources on your load mod journey. So, by writing down what happens and when, including the person you are speaking with, you will be better able to hold you and your lender accountable. There are rules and statutes that can protect you, so in the event you need an attorney, your notes can help determine if there have been any violations, and help you build a case. In fact, this goes both ways because your bank records everything when you speak with them, and can use everything and anything you say against you; so if you don’t feel comfortable answering a question, you can say: “I’ll get back to you on that” or “I’m not sure, my attorney will be able to answer that.”
  9. Be patient. It’s usually not easy to modify your loan; in fact, it can take months or even years to do, especially if you’re in bankruptcy. The answer is to be patient or hire a reputable firm to handle the process for you.
  10. Don’t take “no” for an answer. Even if you’ve been denied, banks are known for erroneous claims, so you sometimes do have the opportunity to turn it around. For example, we’ve seen denials happen for having too much income and too little income even when those circumstances were not valid. You can file a complaint with the Consumer Financial Protection Bureau, which may or may not have an impact on your loan modification being approved, but almost always makes you feel better.

We hope these tips help you make it through the loan modification process successfully, whether you do it on your own or seek professional help.

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