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What is a Loan Modification?
When a homeowner is unable to meet the terms of their loan due to financial hardship, the loan can be modified, creating a solution for both the owner and the lender. This is done without refinancing the loan; modifications may extend the payment term or reduce the principal on the note. The loan is adjusted so that the homeowner is able to make their payments, keeping the lender happy and the homeowner out of the danger of foreclosure.
Although it seems unlikely, banks and lenders are very willing to negotiate. They inevitably lose money on foreclosures and if they can find a way to keep a loan viable, they will. However, homeowners don’t have the time, resources, or information to put together the necessary presentation and proposals. Because our loan modification agents are professionals, banks and lenders are more likely to give weight to their proposals.
When putting together a loan modification proposal, our trained and qualified consultants analyze the client’s financial situation, looking at everything from current loan payments to monthly expenditures on groceries. Analyzing this comprehensive information allows the consultant to determine whether or not a client is a good candidate for loan modification. One of the key things that they look for is hardship. If a legitimate hardship, including but not limited to reduced income, divorce, an ARM that adjusted higher, or loss of employment exists, the loan modification consultant will then put together an extensive portfolio for the client’s particular case.
This information, including a financial prospectus worksheet, cost benefit analysis for the lender, financial analysis for the owner, a current comparative market analysis of the worth of the home, and a cross cost analysis, is then presented to the bank or lender, along with two loan restructuring proposals. The homeowner does not have to be present; their only role is to provide correct and current information. The loan modification agent works as an advocate and consultant, and will create the best possible financial solution for both the homeowner and the lender.
Relief for Home Owners
These are turbulent financial times, and homeowners are being hit especially hard by recent economic crises. If you are struggling to make your loan payments or worry about foreclosure, your best option may be a loan modification.
The essential requirement behind qualifying for a loan modification is financial hardship. Some good examples of loan-specific hardships include:
- Those who are a few months behind on their payments
- Those with negative amortization loans (the payment is lower than the interest rate, so the balance owed actually grows)
- Those with ARM loans that are about to adjust or have very recently adjusted
- Those who are upside down on their loans (they owe more than the home is worth)
Additionally, personal financial hardships are taken into account. These can include:
- Reduced income or hours
- Divorce or separation
- Excessive medical bills or back taxes
- Failed businesses or loss of employment
Banks and lenders do not want to foreclose. It’s a long, expensive process and they always lose money. They are very open to modifying loans—provided they are given a professional, realistic proposal package. Homeowners simply don’t have the resources and knowledge to put this together. However, our trained and qualified consultants are loan modification experts. They will come to your home and determine whether or not you are a good candidate. After that, your only task is to provide accurate and complete information. They become your advocate with banks and lenders, helping create new loan terms and long-term financial solutions.
Services
Loan modification takes your existing loan and creates long-term solutions to enable you to meet the terms in times of hardship.
If you are unable to make your loan payments due to financial setbacks or temporary problems, we can negotiate to find new terms. We work with you and your lender to modify your loan into something that everyone is happy with—keeping you out of foreclosure.
To begin the process, our home loan modification experts will come to you. They’ll help you gather all of the necessary information to put together a comprehensive analysis. This will identify your particular hardships and financial obligations, and will allow HLP to determine whether or not you are a good candidate for loan modification.
If we feel that we can help you, we will take all of the information you provide and put together the necessary components to present to the lender. Some of the elements include:
- A financial prospectus workout, in which we detail all of your income, assets, and expenditures to prove to the lender that you are a good long-term investment.
- A letter of hardship, in which we help you detail clearly and thoughtfully why you need financial relief.
- A cost-benefit analysis for the lender, in which we document exactly how much the lender stands to lose if the loan or mortgage is not modified and the home has to go into foreclosure.
- A financial analysis, in which we establish what your financial situation would be under new, lower monthly loan payments.
- A current Comparative Market Analysis of your property, which gives an accurate idea of what the property is worth right now, rather than six months or a year ago.
- Two loan restructuring proposals, in which we propose two new loan scenarios that work out best for you and your lender.
Finally, we offer unlimited negotiations on your behalf. We work hard and quickly, and will do whatever we need to in order to get you the best loan modification possible. We also involve you in the process by giving you 24-hour-a-day online access to check your modification status and see any updates to your file.
In essence, we take all of your information and combine it with our experience, contacts, and knowledge, creating the best possible financial solutions for you. |
| Check out these examples of how a Loan Modification can help you restructure your financial circumstances to get you back on the right track. |
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