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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 principle 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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